The United States government has announced the removal of two provisions aimed at combating money laundering with cryptocurrencies from the National Defense Authorization Act (NDAA). The NDAA is known as a law that outlines how the Secretary of Defense can use federal funds. The two specific provisions that were removed from the extensive list of items proposed a comprehensive review and reporting system for crypto activities to fight against illegal practices.
The first provision tasked the U.S. Treasury Secretary to establish a risk-focused review and auditing system for financial institutions, in coordination with banks and government regulators. The second provision addressed the struggle against money laundering crimes involving anonymous cryptocurrency transactions, including crypto mixing platforms. This step included the preparation of a report detailing the volumes of cryptocurrency transactions associated with sanctioned entities.
Additionally, the report was to also cover legal regulatory approaches adopted by other jurisdictions. Following these developments, the report was expected to guide the U.S. government in implementing legal regulations for the cryptocurrency market.
On July 28, the U.S. Senate announced its approval of the provisions of the NDAA worth $886 billion. The changes directed towards the cryptocurrency market included some elements from the Digital Asset Anti-Money Laundering Act introduced in 2022 and the Responsible Financial Innovation Act, which aims to prevent another FTX-like disaster in the sector.
This legislation was proposed by a group of senators including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall. Recently, the U.S. government continues to discuss issues related to alleged money laundering and terrorism financing through the use of cryptocurrencies.