US Senate Approves Defense Bill Targeting Crypto Mixers


US Senate Passes $886 Billion NDAA with Stricter Oversight on Crypto Trading


On July 27, the United States Senate approved the 2024 National Defense Authorization Act (NDAA), allocating $886 billion for defense purposes. Notably, the bill includes a provision aimed at tightening oversight on institutions involved in crypto trading, particularly targeting crypto mixers and anonymity-enhancing coins.

A group of senators, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall, advanced the crypto-related amendment within the NDAA. The amendment incorporates elements from both the Digital Asset Anti-Money Laundering Act, introduced in 2022, and the Responsible Financial Innovation Act, which seeks to prevent incidents similar to the FTX-style event in the crypto industry.

The NDAA plays a crucial role in authorizing the utilization of federal funding by the country’s defense department. With this amendment, greater scrutiny is expected over cryptocurrency activities to enhance transparency and combat potential money laundering risks.

US Senate Approves NDAA Amendment to Strengthen Crypto Oversight

The amendment in the NDAA necessitates the creation of examination standards specifically for the crypto industry. These standards will play a crucial role in evaluating and managing risks associated with crypto-related businesses, ensuring their adherence to relevant sanctions and anti-money laundering regulations.

Additionally, the amendment mandates the Treasury Department to conduct a study focused on combating anonymous crypto transactions. This study targets the utilization of crypto mixers, such as Tornado Cash, which enable users to conduct private transactions. The objective is to address concerns related to potential illicit activities and money laundering facilitated by these anonymity-enhancing tools.

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US Treasury Sanctions Crypto Mixer and China Investment Disclosure in NDAA

US Treasury Sanctions Crypto Mixer: In 2022, the US Treasury Department imposed sanctions against the crypto mixer Tornado Cash, prohibiting its use by residents. Despite being designed to provide anonymity for crypto transactions, the mixer became a preferred tool for malicious actors seeking to conceal ill-gotten cryptocurrencies obtained from hacks and exploits. The Treasury Department’s investigation revealed that the mixer lacked adequate controls to prevent money laundering by these bad actors within the crypto space.

China Investment Disclosure Amendment: The NDAA includes a crucial amendment requiring companies in the United States to disclose their investments in China. Senator Bob Casey emphasized the necessity of this notification to enable the government to assess the transfer of “critical technology” to their “adversaries.” The provision aims to enhance transparency and understanding of potential risks related to national security when investing in China, safeguarding against potential threats to US interests.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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