September 15, 2023

U.S. Senator Catherine Cortez Masto Joins Bipartisan Effort to Combat Money Laundering in Cryptocurrency

Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) has joined a bipartisan group of senators in cosponsoring the Digital Asset Anti-Money Laundering Act. This legislation aims to close loopholes in current law and bring cryptocurrency companies into greater compliance with anti-money laundering and countering the financing of terrorism (AMF/CFT) frameworks.

Stopping Criminal Organizations

Senator Cortez Masto emphasizes the need to stop transnational drug cartels and other criminal organizations from funding their illegal activities through cryptocurrencies. The bipartisan bill will ensure that cryptocurrency companies follow the same rules as banks, close loopholes that criminals are taking advantage of, and provide financial institutions with the necessary tools to go after bad actors.

Endorsements

The bipartisan bill has received endorsements from various organizations, including the Bank Policy Institute, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, AARP, National Consumer Law Center, and National Consumers League.

Addressing the Risks

The Treasury Department, Department of Justice, and other national security and financial crime experts have warned about the increasing use of digital assets like cryptocurrencies for money laundering, drug trafficking, ransomware attacks, theft and fraud schemes, terrorist financing, and other crimes. Rogue nations like Iran, Russia, and North Korea have also used digital assets to launder stolen funds, evade sanctions, and fund illegal weapons programs.

In 2022, illicit digital asset transactions reached an all-time high of at least $20 billion.

Key Provisions of the Digital Asset Anti-Money Laundering Act

• Extend Bank Secrecy Act (BSA) responsibilities, including Know-Your-Customer requirements, to digital asset wallet providers, miners, validators, and other network participants.
• Address the gap with respect to “unhosted” digital wallets by directing FinCEN to implement its proposed rule requiring verification and reporting for certain digital asset transactions.
• Direct FinCEN to issue guidance to financial institutions on mitigating risks associated with anonymized digital assets.
• Strengthen enforcement of BSA compliance by establishing examination and review processes for MSBs and other digital asset entities.
• Extend BSA rules regarding reporting of foreign bank accounts to include digital assets.
• Mitigate the illicit finance risks of digital asset ATMs by requiring regular address updates and identity verification.

Bipartisan Support

In addition to Senators Cortez Masto, Warren, Marshall, Manchin, and Graham, this bipartisan legislation is supported by Senators Gary Peters, Dick Durbin, Tina Smith, Angus King, Jeanne Shaheen, Bob Casey, Richard Blumenthal, and Michael Bennet.

Read the full bill text HERE.

About Senator Cortez Masto

Senator Cortez Masto, a member of the Senate Banking, Housing, and Urban Affairs Committee and a former Attorney General, has been a strong advocate for consumers and small business owners. Her bipartisan legislation to combat money laundering and terrorism was signed into law, ensuring that the Financial Crimes Enforcement Network (FinCEN) works with tribal law enforcement agencies, protects against domestic terrorism, and focuses on virtual currencies.