Like a strict mom laying down the rules for her household, Senator Elizabeth Warren, alongside Senator Roger Marshall, introduced the Digital Asset Anti-Money Laundering Act with a firm hand. Warren and Marshall originally introduced the Digital Asset Anti-Money Laundering Act in 2022.
The legislation aims to mitigate risks posed by cryptocurrencies to U.S. national security. It focuses on closing loopholes in anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks. The bill proposes extending Bank Secrecy Act responsibilities to various digital asset participants, including wallet providers, miners, validators, and requires compliance with Know-Your-Customer requirements.
It also addresses unhosted digital wallets, prohibiting the use of digital asset mixers, and enhancing enforcement of BSA compliance. The Act emphasizes safeguarding U.S. national security against illicit uses of digital assets, such as money laundering, terrorism financing, and evasion of sanction
The evolving regulatory landscape for Bitcoin Mining in the United States presents a complex picture. On the federal level, proposed legislation like the Digital Asset Anti-Money Laundering Act seeks to extend Bank Secrecy Act (BSA) responsibilities to various actors in the digital asset space.
Warren will have to fight states to win.
States Like:
Mississippi
Contrastingly, state-level legislation in places like Mississippi adopt a more accommodating stance towards Bitcoin mining. The Mississippi Digital Asset Mining Act, passed by the state Senate and authored by Sen. Josh Harkins, is designed to protect the rights of cryptocurrency miners. A key element of this legislation is the exemption of home and business miners from the money transmitter status, a move that significantly eases the regulatory burden on small-scale and individual miners.
WYOMING
Wyoming has passed over 35 laws since 2016 to regulate various aspects of the cryptocurrency industry. These laws have been instrumental in attracting crypto and blockchain businesses to the state. Notable legislation includes a law exempting utility tokens from securities regulation, provided they are used for consumptive purposes. Other laws exempt cryptocurrency activities from state money transmitter laws, allow corporate records maintenance on blockchains, and exempt virtual currencies from state property tax. Wyoming also introduced a special-purpose depository institution (SPDI) for crypto asset custody, adding to its appeal as a crypto-friendly state.
What happens if the digital asset Anti-Money Laundering Act PAsses?
In a scenario where the federal Digital Asset AML Act is enacted, it’s reasonable to anticipate a major shift in the Bitcoin mining landscape. Businesses and Bitcoin advocates might gravitate towards states with more favorable regulations, like Mississippi or Texas to flee from the overreaching federal requirements. This migration could lead to a concentration of mining activities in certain ‘Bitcoin-friendly’ states, potentially impacting the distribution of mining power and the overall dynamics of the Bitcoin market in the US.
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