Sens. Tillis, Hagerty introduce draft of bill targeted at cryptocurrency institutions

U.S. Sens. Thom Tillis (R-NC) and Bill Hagerty (R-TN) released a discussion draft of a bill that would ensure that cryptocurrency financial institutions follow Bank Secrecy Act anti-money laundering (BSA/AML) standards.

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In addition, the Ensuring Necessary Financial Oversight and Reporting of Cryptocurrency Ecosystems (ENFORCE) Act, would provide regulators and law enforcement with additional important tools to combat digital asset illicit finance.

“We must take action to stop bad actors who launder with cryptocurrency, however this does not provide a license for heavy-handed, regulatory-obsessed lawmakers to regulate an entire industry into oblivion,” Tillis said. “Congress needs to focus on right-sizing its regulatory approach to cryptocurrency, which requires building consensus among lawmakers, law enforcement, and stakeholders to protect consumers and fight illicit actors.”

Specifically, the ENFORCE Act would:

• Ensure Bank Secrecy Act anti-money laundering (BSA/AML) requirements apply to all centralized and customer-facingdigital asset financial institutions;
• Clarify Treasury’s authority to use a powerful illicit finance policy tool against transactions and financial institutions associated with digital asset money laundering;
• Ensure digital asset bad actors and money launderers cannot be tipped off to investigations into their activities;
• Establish a public-private task force to coordinate digital asset illicit finance information sharing and best practices;
• Establish formal examination standards for BSA/AML compliance for digital asset financial institutions; and
• Explicitly state a rule of construction to ensure that the bill does not limit or restrict any current BSA/AML requirements.

“This discussion draft represents a positive step towards right-sizing our approach to regulating cryptocurrency while preserving digital innovation, and I look forward to receiving feedback and working with my colleagues on the path forward,” Tillis added.

Tillis and Hagerty are members of the Senate Banking, Housing, and Urban Affairs Committee.