Elizabeth Warren wants extreme rules on bitcoin use

Last Updated: 15 December 2022

New plans from the United States are causing turmoil in the world of bitcoin (BTC). At issue this time is a proposal called the Digital Asset Anti-Money Laundering Act Of 2022.

Senators Elizabeth Warren and Roger Marshall are to provide a completely new legal framework for the use of bitcoin. If the proposal eventually comes to pass, users of BTC will have to comply with Know Your Customer (KYC) rules.

Think of this as identifying and collecting data as is already the case with a bank, or large crypto exchanges. In practice, programmers would be required to build in similar measures. As a user, you would also be punishable if you do not comply with those rules. How this particular ‘idea’ is to be enforced is not clear. After all, there are more places in the world to write (open) software than America.

Privacy tools are also under fire. Earlier this year, another developer was arrested in the Netherlands. Alexey Pertsev is still in jail. In this proposal, companies should avoid contacting bitcoin associated with privacy tools. As a rule, after identification, you can sell your bitcoin in different places. However, with new guidelines, there may be additional rules for that. There are already databases with blacklists for numerous money flows.

Policies are to be outlined by the Financial Crimes Enforcement Network (FinCEN). That in turn is a part of the Ministry of Finance. They specialise in collecting data on money flows. Another notable outcome is that companies will have to report on customers to FinCEN even without an application.

There should also be uniform rules for numerous players in the market. From large exchanges to small miners, everyone should fall under a certain term and start complying with rules. An English quote from the proposal: “Classifying custodial and unhosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV searchers, and other validators with control over network protocols as money service businesses.”

This is a first step towards a new set of rules. Nothing has been confirmed and nothing is fixed yet. What is clear, however, is that work is being done to regulate the industry in the United States as well.

Author

  • Ivan came across the topic of cryptocurrencies in early 2016 and, as an author and enthusiast, has been intensively involved with the topics of cryptocurrencies, blockchain and STOs ever since.

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