[Congressional Record Volume 170, Number 115 (Thursday, July 11, 2024)]
[Senate]
[Pages S5027-S5029]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2754. Ms. WARREN submitted an amendment intended to be proposed by

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her to the bill S. 4638, to authorize appropriations for fiscal year 
2025 for military activities of the Department of Defense, for military 
construction, and for defense activities of the Department of Energy, 
to prescribe military personnel strengths for such fiscal year, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of title X, add the following:

            Subtitle I--Digital Asset Anti-money Laundering

     SEC. 1096. SHORT TITLE.

       This subtitle may be cited as the ``Digital Asset Anti-
     Money Laundering Act''.

     SEC. 1097. DEFINITIONS.

       (1) Anonymity enhanced cryptocurrency.--The term 
     ``anonymity enhanced cryptocurrency'' means a digital asset 
     containing any feature that--
       (A) prevents tracing through distributed ledgers; or
       (B) conceals or obfuscates the origin, destination, and 
     counterparties of digital asset transactions.
       (2) Digital assets.--The term ``digital asset'' means an 
     asset that is issued or transferred using a cryptographically 
     secured distributed ledger, blockchain technology, or any 
     other similar technology.
       (3) Digital assets kiosk.--The term ``digital assets 
     kiosk'' means a digital assets automated teller machine that 
     facilitates the buying, selling, and exchange of digital 
     assets.
       (4) Digital assets mixer.--The term ``digital assets 
     mixer'' means a website, software, or other service with 
     features that conceal or obfuscate the origin, destination, 
     or counterparties of digital asset transactions.
       (5) Financial institution.--The term ``financial 
     institution'' has the meaning given the term in section 
     5312(a) of title 31, United States Code.
       (6) Money services business.--The term ``money services 
     business'' has the meaning given the term in section 1010.100 
     of title 31, Code of Federal Regulations.
       (7) Unhosted wallet.--The term ``unhosted wallet'' means 
     software or hardware that facilitates the storage of public 
     and private keys used to digitally sign and securely transact 
     digital assets, such that the stored value is the property of 
     the wallet owner and the wallet owner has total independent 
     control over the value.
       (8) Validator.--The term ``validator'' means a person or 
     entity that--
       (A) processes and validates, approves, or verifies 
     transactions, or produces blocks of digital asset 
     transactions to be recorded on a cryptographically secured 
     distributed ledger or any similar technology, as specified by 
     the Secretary of the Treasury; and
       (B) may perform other such services that may secure a 
     digital assets kiosk network.

     SEC. 1098. DIGITAL ASSET REQUIREMENTS.

       (a) Digital Assets Participants Designation.--
       (1) Definition of financial institution.--
       (A) In general.--Section 5312(a)(2) of title 31, United 
     States Code, as amended by section 6110(a)(1) of the Anti-
     Money Laundering Act of 2020 (division F of Public Law 116-
     283), is amended--
       (i) in subparagraph (Z), by striking ``or'' at the end;
       (ii) by redesignating subparagraph (AA) as subparagraph 
     (BB); and
       (iii) by inserting after subparagraph (Z) the following:
       ``(AA) Unhosted wallet providers, digital asset miners, 
     validators, or other nodes that may act to validate or secure 
     third-party transactions, independent network participants 
     (including maximal extractable value searchers), miner 
     extractable value searchers, other validators or network 
     participants with control over network protocols, or any 
     other person facilitating or providing services related to 
     the exchange, sale, custody, or lending of digital assets 
     that the Secretary shall prescribe by regulation.''.
       (B) Effective date.--The amendments made by subparagraph 
     (A) shall take effect on the day after the effective date of 
     the final rules issued by the Secretary of the Treasury 
     pursuant to section 6110(b) of the Anti-Money Laundering Act 
     of 2020 (division F of Public Law 116-283).
       (2) Regulations.--
       (A) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of the Treasury, through 
     the Director of the Financial Crimes Enforcement Network, 
     shall promulgate regulations imposing requirements under 
     subchapter II of chapter 53 of title 31, United States Code, 
     on financial institutions described in subparagraph (AA) of 
     section 5312(a)(2) of title 31, United States Code, as added 
     by paragraph (1)(A) of this subsection.
       (B) Exemption.--The Secretary of the Treasury, through the 
     Director of the Financial Crimes Enforcement Network, should 
     consider for exemption from the regulations issued under 
     subparagraph (A) assets--
       (i) issued or transferred using a cryptographically secured 
     distributed ledger, blockchain technology, or any other 
     similar technology used solely for internal business 
     applications;
       (ii) not offered for sale, traded, or otherwise converted 
     to fiat currency or another digital asset; or
       (iii) otherwise deemed to pose little illicit finance risk.
       (C) Periodic reviews.--The Secretary of the Treasury, 
     through the Director of the Financial Crimes Enforcement 
     Network, shall periodic reviews of the classifications under 
     paragraph (2).
       (b) Registration Rules.--The Financial Crimes Enforcement 
     Network has the authority to subject the entities described 
     in subsection (a) to the registration rules under section 
     5330 of title 31, United States Code, and the foreign 
     registration rules under section 1022.380(a)(2) of title 31, 
     Code of Federal Regulations.
       (c) Implementation of Proposed Rule.--Not later than 1 year 
     after the date of enactment of this Act, the Financial Crimes 
     Enforcement Network shall finalize the proposed virtual 
     currency rule (85 Fed. Reg. 83840; relating to requirements 
     for certain transactions involving convertible virtual 
     currency or digital assets).
       (d) Reporting Requirements.--Not later than 18 months after 
     the date of enactment of this Act, the Financial Crimes 
     Enforcement Network shall promulgate regulations that require 
     United States persons with greater than $10,000 in digital 
     assets in 1 or more accounts outside of the United States to 
     file a report described in section 1010.350 of title 31, Code 
     of Federal Regulations, using the form described in that 
     section, in accordance with section 5314 of title 31, United 
     States Code.
       (e) Treasury Regulations.--Not later than 18 months after 
     the date of enactment of this Act, the Secretary of the 
     Treasury shall promulgate regulations that require financial 
     institutions to establish controls to mitigate illicit 
     finance risks associated with--
       (1) handling, using, or transacting business with digital 
     asset mixers, anonymity enhanced cryptocurrency, and other 
     anonymity-enhancing technologies, as specified by the 
     Secretary; and
       (2) handling, using, or transacting business with digital 
     assets that have been anonymized by the technologies 
     described in paragraph (1).

     SEC. 1099. EXAMINATION AND REVIEW PROCESS.

       (a) Treasury.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Conference of State Bank Supervisors, 
     shall establish a risk-focused examination and review process 
     for digital assets participants designated as financial 
     institutions and money services businesses to assess--
       (1) the adequacy of antimoney-laundering and countering-
     the-financing-of-terrorism programs and reporting obligations 
     under subsections (g) and (h) of section 5318 of title 31, 
     United States Code; and
       (2) compliance with antimoney laundering and countering-
     the-financing-of-terrorism requirements under subchapter II 
     of chapter 53 of title 31, United States Code.
       (b) SEC.--Not later than 2 years after the date of 
     enactment of this Act, the Securities and Exchange 
     Commission, in consultation with the Secretary of the 
     Treasury, shall establish a dedicated risk-focused 
     examination and review process for entities regulated by the 
     Commission to assess--
       (1) the adequacy of antimoney laundering and countering-
     the-financing-of-terrorism programs and reporting obligations 
     under subsections (g) and (h) of section 5318 of title 31, 
     United States Code; and
       (2) compliance with antimoney laundering and countering-
     the-financing-of-terrorism requirements under subchapter II 
     of chapter 53 of title 31, United States Code.
       (c) CFTC.--Not later than 2 years after the date of 
     enactment of this Act, the Commodity Futures Trading 
     Commission, in consultation with the Secretary of the 
     Treasury, shall establish a dedicated risk-focused 
     examination and review process for entities regulated by the 
     Commission to assess--
       (1) the adequacy of antimoney laundering and countering-
     the-financing-of-terrorism programs and reporting obligations 
     under subsections (g) and (h) of section 5318 of title 31, 
     United States Code; and
       (2) compliance with antimoney laundering and countering-
     the-financing-of-terrorism requirements under subchapter II 
     of chapter 53 of title 31, United States Code.

     SEC. 1099A. DIGITAL ASSETS KIOSKS.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, the Financial Crimes Enforcement 
     Network shall require digital asset kiosks owners and 
     administrators to submit and update the physical addresses of 
     the kiosks owned or operated by the owner or administrator 
     every 90 days, as applicable.
       (b) Rulemaking.--Not later than 18 months after the date of 
     enactment of this Act, the Financial Crimes Enforcement 
     Network shall promulgate regulations requiring digital asset 
     kiosk owners and administrators to--
       (1) verify the identity of each customer using a valid form 
     of government-issued identification or other documentary 
     method, as determined by the Secretary of the Treasury; and
       (2) collect the name and physical address of each 
     counterparty to the transaction.
       (c) Reports.--
       (1) FinCEN.--Not later than 180 days after the date of 
     enactment of this Act, the Financial Crimes Enforcement 
     Network shall issue a report on digital assets kiosk networks 
     operating as money services businesses that have not 
     registered with the Financial Crimes Enforcement Network in 
     violation of section 1022.380 of title 31, Code of Federal 
     Regulations, that includes--
       (A) estimates of the number and locations of suspected 
     unlicensed operators, as applicable; and

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       (B) an assessment of any additional resources the Financial 
     Crimes Enforcement Network determines to be necessary to 
     investigate the unlicensed digital asset kiosk networks.
       (2) DEA.--Not later than 1 year after the date of enactment 
     of this Act, the Drug Enforcement Administration shall, in 
     consultation with other agencies as appropriate, issue a 
     report identifying recommendations to reduce drug trafficking 
     and money laundering associated with digital assets kiosks.

     SEC. 1099B. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     the Treasury such sums as are necessary to carry out this 
     subtitle.
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