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U.S. Crypto Standards In The Works: U.S. Senators Reintroduce the Responsible Financial Innovation Act and Propose A Defense Bill Amendment

Last week, in a bi-partisan effort to create a comprehensive regulatory framework for crypto assets, Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) reintroduced the Lummis-Gillibrand Responsible Financial Innovation Act (RFIA). This proposed legislation expands on the bill the senators introduced last year by adding new consumer protections and safeguards. Specifically, the proposed legislation would codify a clear regulatory framework for which crypto assets are securities or commodities, impose penalties for willful anti-money laundering violations, require stablecoins to be issued by depository institutions, require registration of all crypto asset exchanges, enhance required disclosures to safeguard consumers and provide appropriations for federal agencies to implement the Act, among other requirements. 

Recognizing that the issues impacting the crypto industry also have a direct impact on the policies and funding of defense agencies, Sens. Elizabeth Warren (D-MA) and Roger Marshall (R-KS) joined Lummis and Gillibrand in introducing a crypto-focused amendment to the National Defense Authorization Act (NDAA) that is intended to prevent crypto assets from being used in illicit financial transactions. The proposed amendment would require regulators including the U.S. Department of Treasury, U.S. Commodities Futures Trading Commission and U.S. Securities Exchange Commission to set "risk-focused" anti-money laundering examination standards for money service businesses engaged in crypto asset activities and require Treasury through its Financial Crimes Enforcement Network (FinCen) to give recommendations to Congress regarding crypto asset mixers and anonymity-enhancing crypto assets and obtain detailed information about crypto ATM owners, administrators, transactions, locations and users (crypto ATM owners would be required to verify user identity by ID), and publish a report to Congress detailing licenses and unlicensed crypto ATMs. 

More to follow as these the RFIA and NDAA Amendment develop...

“We must work together to crack down on crypto money launderers and illicit crypto financial transactions. This is not only a matter of U.S. national security but also our economic security,” Senator Marshall said. “Our bipartisan amendment will set commonsense standards to ensure that proper guardrails are in place as crypto use continues grow across the world. I’m proud to join my colleagues in introducing this amendment to the NDAA and will continue my efforts to combat illicit finance.”


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