[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8266 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 8266

To place a 2-year moratorium on financial institutions handling, using, 
 or transacting with funds routed through digital asset mixers and to 
 require the Secretary of the Treasury to carry out a study of digital 
                 asset mixers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 7, 2024

  Mr. Casten (for himself, Mr. Foster, Mr. Sherman, and Mr. Cleaver) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
To place a 2-year moratorium on financial institutions handling, using, 
 or transacting with funds routed through digital asset mixers and to 
 require the Secretary of the Treasury to carry out a study of digital 
                 asset mixers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Blockchain Integrity Act''.

SEC. 2. MORATORIUM ON DIGITAL ASSET MIXERS.

    (a) Moratorium.--
            (1) In general.--During the 2-year period beginning 6 
        months after the date of enactment of this Act, it shall be 
        unlawful for a financial institution to handle, use, or 
        transact with--
                    (A) any incoming funds that have been routed 
                through a digital asset mixer operating on a 
                cryptographically secured distributed ledger; and
                    (B) any outgoing funds routed directly to a digital 
                asset mixer operating on a cryptographically secured 
                distributed ledger.
            (2) Enforcement.--
                    (A) In general.--The Secretary of the Treasury 
                shall enforce this section.
                    (B) Civil penalty.--The Secretary of the Treasury 
                may impose a civil penalty on any financial institution 
                that violates subsection (a) in an amount not greater 
                than $100,000 for each violation.
    (b) Study by Treasury.--The Secretary of the Treasury, in 
consultation with the Securities and Exchange Commission, the Commodity 
Futures Trading Commission, the Attorney General, and such other 
departments and agencies as determined by the Secretary of the 
Treasury, shall carry out a study of digital asset mixers, privacy 
coins, and other anonymity-enhancing technologies.
    (c) Report.--Not later than 18 months after the date of the 
enactment of this Act, the Secretary of the Treasury shall provide to 
the Committee on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate a 
report, to include a classified annex, if necessary, that contains all 
findings made in carrying out the study under subsection (b) that 
analyzes the following issues:
            (1) Current typologies of digital asset mixers, privacy 
        coins, and other anonymity-enhancing technologies, and 
        historical transaction volume.
            (2) Estimates of the percentage of transactions in 
        paragraph (1) that are believed to be connected, directly or 
        indirectly, to illicit finance, including digital asset 
        transaction volumes associated with sanctioned entities and 
        entities subject to special measures pursuant to section 5318A 
        of title 31, United States Code, and a description of any 
        limitations applicable to the data used in such estimates.
            (3) Information about legitimate uses of digital asset 
        mixers, including transaction volumes associated with payments 
        to journalists in authoritarian regimes, donations to the 
        government of Ukraine, and for enhanced privacy and security 
        purposes.
            (4) The capacity of the Financial Crimes Enforcement 
        Network, the Office of Foreign Assets Control, and Federal and 
        State law enforcement agencies to track, prevent the transfer 
        of, freeze, and confiscate funds that have been processed 
        through digital asset mixers, privacy coins, and other 
        anonymity-enhancing technologies, including--
                    (A) general estimates regarding the number of 
                instances on an annual basis such agencies were able to 
                prevent the transfer of funds through such methods; and
                    (B) the extent to which such agencies utilized 
                blockchain analytics firms when preventing the transfer 
                of funds through such methods.
            (5) New and emerging obfuscation tools and methods to 
        reduce transparency on a cryptographically secured distributed 
        ledger.
            (6) Financial incentives for relayers or any other party in 
        the process of validating transactions on a cryptographically 
        secured distributed ledger, including an assessment of the 
        contractual relationship between relayers and digital asset 
        mixers.
            (7) Regulatory approaches employed by other jurisdictions 
        to address illicit uses of digital asset mixers, privacy coins, 
        and other anonymity-enhancing technologies.
            (8) Recommendations for legislation or regulation to 
        address the illicit uses of digital assets, including with 
        respect to--
                    (A) covered nations, as defined in section 
                4872(d)(2) of title 10, United States Code, and 
                affiliated actors;
                    (B) Foreign Terrorist Organizations, as designated 
                by the Secretary of State, and affiliated actors;
                    (C) sanctions evasion by Russian entities, 
                individuals, and affiliated actors;
                    (D) human trafficking and the sexual exploitation 
                of children;
                    (E) international trafficking of fentanyl, fentanyl 
                precursors, or other related opioids;
                    (F) organized crime groups in East and Southeast 
                Asia; and
                    (G) darknet marketplaces.
    (d) Definitions.--In this section:
            (1) Anonymity-enhancing technologies.--The term 
        ``anonymity-enhancing technologies'' means software, products, 
        or services that facilitate digital asset transactions with 
        enhanced anonymity, as defined by the Financial Crimes 
        Enforcement Network.
            (2) Digital asset mixer.--The term ``digital asset mixer'' 
        means a website, software, or other service designed to conceal 
        or obfuscate the origin, destination, and counterparties of 
        digital asset transactions.
            (3) Financial institution.--The term ``financial 
        institution'' has the meaning given the term in section 5312(a) 
        of title 31, United States Code.
            (4) Privacy coin.--The term ``privacy coin'' means a 
        digital asset designed to--
                    (A) hinder tracing through distributed ledgers; or
                    (B) conceal or obfuscate the origin, destination, 
                and counterparties of digital asset transactions.
            (5) Relayers.--The term ``relayers'' means a person, 
        entity, software program, or person or entity operating such 
        software program, that receives, communicates, or otherwise 
        conveys blocks of transactions to a validator, miner, or other 
        entity that serves a similar function.
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