{"id":124671,"date":"2023-07-19T18:33:43","date_gmt":"2023-07-19T18:33:43","guid":{"rendered":"https:\/\/dripp.zone\/news\/bipartisan-bill-to-regulate-defi-crypto-security-risks-introduced-into-us-senate-crypto-news\/"},"modified":"2023-07-19T18:33:45","modified_gmt":"2023-07-19T18:33:45","slug":"bipartisan-bill-to-regulate-defi-crypto-security-risks-introduced-into-us-senate-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/bipartisan-bill-to-regulate-defi-crypto-security-risks-introduced-into-us-senate-crypto-news\/","title":{"rendered":"Bipartisan bill to regulate DeFi, crypto security risks introduced into US Senate\n – Crypto News"},"content":{"rendered":"
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United States Sen. Jack Reed sponsored a bipartisan bill introduced into the Senate on July 18 that would tighten Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and sanctions requirements for decentralized finance (DeFi). According to a news release on Reed’s website, the bill is titled<\/a> the Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act.<\/p>\n

The bill would subject DeFi operations to the same requirements as “other financial companies, including centralized crypto trading platforms, casinos, and even pawn shops.” The bill would make \u201canyone who controls that project\u201d liable for the use of the DeFi service by sanctioned persons. Furthermore:<\/p>\n

\u201cIf nobody controls a DeFi service, then \u2014 as a backstop \u2014 anyone who invests more than $25 million in developing the project will be responsible for these obligations.\u201d<\/p><\/blockquote>\n

The bill would also \u201cmodernize\u201d Treasury Department AML powers by extending them beyond the traditional financial system. According to the statement:<\/p>\n

\u201cAs new technologies like cryptocurrency increasingly enable new ways to conduct financial transactions, it is critical to extend Treasury’s authority to crack down on illicit financial activity that may occur outside the banking sector.\u201d<\/p><\/blockquote>\n

The bill also sets new requirements for operators of crypto kiosks (or ATMs) to prevent their use in money laundering. Kiosk operators would be required to verify the identities of both counterparties in a transaction. <\/p>\n

Related: <\/em><\/strong>Centralized exchanges will become gateways for DeFi \u2014 dYdX Foundation CEO<\/em><\/strong><\/a><\/p>\n

The bill has not been published<\/a> at the time of writing. A member of Reed’s staff contacted by Cointelegraph could not say when the bill would be published. A text purporting to be the draft bill has been posted on GitHub.<\/p>\n

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Case in point:<\/p>\n

The definition of “control” is so broadly worded that it’s meaningless. No thresholds, no specifics, just “control,” as determined by the Secretary of the Treasury. Completely and utterly unworkable.https:\/\/t.co\/rVk26MJwfA<\/a><\/p>\n

\u2014 Meat (,) (@MeatEsq) July 19, 2023<\/a><\/p><\/blockquote>\n

Crypto Twitter has wasted no time in condemning the bill. One commenter called<\/a> it’s “an existential threat to DeFi” and a “nonstarter.” Another said<\/a> that \u201cimposing control responsibility for a $25mm investment is going to chill VC investment into DeFi b\/c passive tokenholding does NOT equal control.\u201d<\/p>\n

Sens. Mike Rounds, Mark Warner and Mitt Romney are cosponsors of the bill. Reed and Warner were cosponsors of a bill introduced<\/a> by Sen. Elizabeth Warren \u2014 the Digital Asset Sanctions Compliance Enhancement Act \u2014 in March 2022. <\/p>\n

Magazine: US enforcement agencies are turning up the heat on crypto-related crime<\/a><\/em><\/strong><\/p>\n