[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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