New Crypto Bill Aims to Apply Bank Secrecy Act Rules to Digital Asset Firms

Senators Thom Tillis (R-NC) and Bill Hagerty (R-TN), both members of the Senate Banking, Housing, and Urban Affairs Committee, have released a discussion draft of the Ensuring Necessary Financial Oversight and Reporting of Cryptocurrency Ecosystems (ENFORCE) Act.

The proposed legislation aims to strengthen anti-money laundering (AML) and Bank Secrecy Act (BSA) requirements for centralized and consumer-facing cryptocurrency financial institutions. It would also provide regulators and law enforcement with additional tools to combat illicit use of digital assets.

“We must take action to stop bad actors who launder with cryptocurrency, however this does not provide a license for heavy-handed, regulatory-obsessed lawmakers to regulate an entire industry into oblivion,” said Tillis. He emphasized the need to strike the right balance between regulation and preserving digital innovation.

The ENFORCE Act has several key provisions. It would explicitly apply BSA/AML requirements to all centralized and customer-facing digital asset financial institutions. The bill would also clarify the Treasury Department’s authority to use powerful illicit finance policy tools against digital asset money laundering.

The legislation also seeks to prevent criminals from being tipped off about investigations into their activities. It would establish a public-private task force to coordinate information sharing and best practices for combating digital asset illicit finance. The bill would also set formal examination standards for BSA/AML compliance in the crypto industry.

Overall, the discussion draft represents an effort by the senators to address the illicit use of cryptocurrencies while preserving the industry’s potential for innovation. The draft was released the day before the committee heard Treasury Department Deputy Secretary Adewale “Wally” O. Adeyemo’s testimony on illicit finance, terrorism, and sanctions evasion.  

At the hearing, the Treasury, Republicans, and Democrats agreed that there is a need for regulatory frameworks to address the misuse of cryptocurrencies by terrorists, state actors, and criminal organizations. The Democrats, in particular, pushed for strict regulatory measures similar to those applied to traditional financial institutions.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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