Senators Elizabeth Warren (D-Mass) and Senator Roger Marshall (R-Kan) have launched the “Digital Asset Anti-Cash Laundering Act Of 2022,” a invoice which might have sweeping impacts on the privateness of bitcoin customers.
If enacted, the invoice would require custodial and self-custodial pockets suppliers and miners to implement know-your-customer (KYC) techniques. It could additionally prohibit monetary establishments from interacting with privateness instruments comparable to CoinJoin in an effort to restrict the power of customers to keep up their privateness. Whereas the invoice focuses on such measures to be able to curb cash laundering, instruments comparable to CoinJoin merely restore the customers’ capability to make use of bitcoin in a means that extra intently resembles bodily money. That’s, the financial institution is aware of when a shopper withdraws money at an ATM, however has restricted information of what any consumer does with it afterwards. This cash-like attribute is barely realized in cryptocurrencies via instruments comparable to CoinJoins. Along with this, regulating our bodies could be allowed to file stories and surveil customers with out want for a warrant or authorities request.
In keeping with the invoice, it additionally requires a “rule classifying custodial and unhosted pockets suppliers, cryptocurrency miners, validators, or different nodes who could act to validate or safe third-party transactions, unbiased community members, together with MEV searchers, and different validators with management over community protocols as cash service companies,” which might indicate that Bitcoin nodes could be labeled as comparable to properly.
The invoice seeks for the Monetary Crimes Enforcement Community (FinCEN) to implement the steerage which, based on blockchain advocacy group CoinCenter, “is probably the most direct assault on the private freedom and privateness of cryptocurrency customers and builders we’ve but seen.”
Senator Elizabeth Warren has beforehand expressed her want to control the cryptocurrency trade, most just lately after the collapse of FTX. The invoice would seemingly face in depth scrutiny as, amongst many different points, it will pressure unhosted wallets suppliers to register earlier than publishing their merchandise, successfully inserting limits on free speech, as code has been confirmed to be free speech.