WASHINGTON, D.C.— Today, U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) urged members to include their illicit finance amendment, which was passed in the Senate version of the 2024 National Defense Authorization Act, in the final version of the bill as it emerges from the conference process. The senators highlighted the urgent need for this amendment to become law following reports that Hamas has used unregulated crypto asset exchanges to fund their war in Israel and to pass comprehensive legislation to create a well-regulated and safe crypto asset market in the United States.
“Now more than ever, we need to ensure crypto assets cannot be used for nefarious purposes by closing the loopholes criminals are eager to exploit. We need to combat the risks posed by unregulated crypto asset exchanges,” said Lummis. “Recent terrorist actions have shown us just how desperately we need to weed out bad actors and ensure crypto assets are not used to evade sanctions and fund terrorism.”
“Utilization of unregulated crypto exchanges highlights the continued damage from Congress’s failure to pass comprehensive regulatory legislation for digital assets. We need to build a safe and well-regulated marketplace that prohibits the use of cryptocurrencies for money laundering and illicit finance and exiles bad actors to the dark corners of the web,” said Gillibrand. “The Senate-passed NDAA included our amendment to require federal regulators to enact strong examination standards that will help prevent the utilization of cryptocurrencies in illegal activities. This is an issue that is critical to the national security of the U.S. and our allies and it must be included in the final NDAA.”
Lummis and Gillibrand introduced this amendment alongside Sens. Roger Marshall (R-KS) and Elizabeth Warren (D-MA). The provisions of the amendment were taken from the 2023 Lummis-Gillibrand Responsible Financial Innovation Act and Sens. Marshall and Warren’s Digital Asset Anti-Money Laundering Act.
BACKGROUND:
Specifically, the amendment:
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- Requires the Secretary of the Treasury to establish examination standards for crypto assets. These examination standards would give examiners more guidance in how to assess the real risks of crypto assets and helps ensure compliance with money laundering and sanctions laws, providing needed legal clarity to crypto exchanges about their regulatory expectations.
- Requires the Treasury Department to conduct a study on the mixers and tumblers that enable anonymous crypto asset transactions to fund organizations like Hamas. The study will include level of their use, legislative and regulatory approaches employed by other jurisdictions, and recommendations to Congress for legislation or regulation.
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