US senior Senators propose a bill to monitor cryptocurrencies for money laundering

2 June 2017

The US Senators are looking to pass the new legislation addressing the gaps in the US regulation of digital currencies in an extensive move to combat money laundering practices of terrorists. Chuck Grassley, a Republican senior senator for Iowa, and Diane Feinstein, a Democrat senior senator for California, are joining their forces to arrange reading of the Senate Bill drafted to prevent money laundering, which is a key source of illicit funds for terrorist groups, drug cartels and other criminal rings.

“The Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017” is a proposed amendment to the existing money laundering and counterfeiting legislation with the inclusion of digital currencies as the emerging subject of abuse by unscrupulous individuals and organizations.

In the bill summary published by Grassley’s office they note that such financial instruments defined by the Treasury Department as stored value cards are effectively turned by criminal groups into backstairs for evading cash flow control hiding the funds during cross-border transfers, as unlike cash they are more easily concealed and are not subject to reporting.

In Section 13 of the bill there is a provision for applying modification to the text of 31 U.S.C. § 5312 with the inclusion of funds in digital format into the scope of financial instruments listed by the law. As a result, such prepaid access devices will be subjected to anti-money laundering reporting requirements specified in the Bank Secrecy Act, when the amount of such digital funds exceeds $10,000.

Apart from this the new bill proposes to ask the Homeland Security to devise the strategy for detecting prepaid access devices and digital currencies at border crossings and entry ports.

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