Two US senators are introducing a new bill to curb money laundering and terrorist financing through cryptocurrencies. The proposal will introduce know-your-customer rules to crypto participants such as wallet providers and miners.
US senators introduced new cryptocurrency law
U.S. Senators Elizabeth Warren and Roger Marshall are introducing a bill to curb money laundering and terrorist financing through cryptocurrency. If the law passes, cryptocurrency miners and wallet providers will be subject to know-your-customer (KYC) rules.
The law will also allow the Financial Crimes Enforcement Network (FinCEN) to enforce a proposed rule that requires institutions to report cold wallets of certain transactions involving wallets. Concerns about the use of crypto to facilitate money laundering and terrorist financing are often voiced by legislators or regulators. It is often used to highlight the need for more robust regulation of the cryptocurrency market.
US cryptocurrency regulations: SEC and CFTC can work together
Apart from the new US senators’ law, two US institutions currently play the biggest role in regulation. Former CFTC chairman Tim Massad says the SEC and CFTC need to work together on this. “The SEC and CFTC can jointly create a self-regulatory organization,” Massad said in a virtual meeting Wednesday. According to Massad, who is now a research fellow at Harvard University’s School of Public Administration, neither the SEC nor the CFTC have the power to deal solely with the regulation of cryptocurrencies.
Massad says the lines are now blurred. He also stated that the precise classification of tokens is a separate issue. He said the CFTC should merge with the SEC to oversee the crypto cash market hosted by exchanges.
SEC sent letters to companies
In one development, US public companies received letters from the SEC about how the troubles may have affected their business. Accordingly, the SEC is reminding companies of current obligations following recent crypto bankruptcies. The letter is intended to illustrate the types of comments a securities agency can send to publicly traded companies. The SEC’s corporate finance division said in a statement:
When meeting their disclosure obligations, companies should consider the need to broadly address crypto-asset market developments in their dossiers, including job descriptions, risk factors, and management’s discussion and analysis.
Finally, SEC chairman Gary Gensler made new statements about cryptocurrencies on Wednesday. As to whether cryptos need their own specific rules, he said he will apply the laws currently in force.
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