US Financial Authority Removes Provisional Crypto AML Regulations
The United States government removed two provisions from the National Defence Authorisation Act (NDAA) related to crypto anti-money laundering (AML) regulations to combat financial crimes.
The US government removed two regulations from the NDAA, which aimed to address the AML concerns in the crypto industry. The omitted provisions were designed for a secure system in virtual assets monitoring. The first removal is the mandatory collaboration of the US Secretary of Treasury with banking and law enforcement agencies to regulate cryptocurrency in financial institutes. Previously, this system was developed to enhance transparency and compliance in virtual assets service providers. The second provision in AML regulations focused on preventing suspicious transactions in the crypto industry, specially designed to monitor crypto mixers and tumblers. This ensures crypto firms report all the transactions linked to the sanctioned entities. Moreover, reports shared by the companies will be compared by government agencies with jurisdictions to guide the crypto industry and bolster their compliance procedure.
The NDAA is a powerful department that combats money laundering and is an essential law governing how the nation’s defence department can use government funds. Disputes and arguments have been triggered in the crypto sector after the elimination of these virtual asset legislative regulations. The Digital Asset Anti-Money Laundering Act, introduced in 2022, influenced these two significant changes in crypto AML measures. The provisions secure the crypto sector and prevent future financial crimes like FTX. The unlawful usage of cryptocurrencies has recently become a growing concern for authorities. The US government is discussing additional surveillance on all national and international platforms.
The US Financial Services Committee members also arranged a meeting in November to discuss the crypto registration and prevent illicit activities. Delegation overviewed rigid measures crypto service providers took to prevent money laundering and terrorist financing. While the crypto industry gave mixed reactions, some participants see this as a good thing, thinking it might encourage innovation and expansion in the cryptocurrency market, whilst others voice concerns about potential risks and weaknesses. The other regulatory bodies, including the Financial Crimes Enforcement Network (FinCEN), contend that these steps are necessary to stop illegal acts that can be made more accessible by cryptocurrencies, such as money laundering and financing of terrorism.
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