New US Senate Bill Could be a Threat to Bitcoin Innovation
Senate Bill 1241, also known as “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017, may stifle Bitcoin’s growth and innovation.
More limits than solutions
Along with fellow Senators Dianne Feinstein, John Cornyn and Sheldon Whitehouse, the bill aimed at modernizing and strengthening criminal laws against money laundering which is a potent source of funding for terrorist organizations, drug cartels and other organized crime syndicates.
Moreover, US Bill S.1241 also aimed at deterring individuals entering the United States borders from bringing with them undeclared assets in the form of Bitcoin or other digital currencies.
It would allow for civil asset forfeitures of Bitcoin and other cryptocurrencies, and require users to declare cryptocurrency assets exceeding $10,000 whenever they cross the US border.
In separate statements, the four Senators pushing for the bill say it is crucial time for United States to address terrorist threats and other criminal activities by targeting the source of their funding, thus the need to recalibrate their anti-money laundering law to keep up with the digital age.
Senator Chuck Grassley says:
“Terrorist organizations, drug cartels, and other criminals are actively looking to exploit and harm Americans, whether by attacking our way of life, flooding our country with highly addictive drugs, or defrauding unknowing victims. The recent terrorist attack in the United Kingdom is the latest somber example of how real these threats are to our country and its allies. We must continue to fight them on every front, and that includes going after the profits of crime that are also used to fuel the ongoing activity of these diabolical enterprises. Our bill updates our money laundering laws for the 21st Century”.
Senator Dianne Feinstein comments:
“Terrorist groups like ISIL and other transnational criminal organizations wouldn’t be able to finance their activities without illegal funds. Blocking these funds is an effective way to disrupt these organizations and prevent crime and terrorism. Our bill adopts many of the recommendations made by the Justice Department to ensure that transnational criminal organizations, including terrorist groups, face consequences for laundering illicit funds, evading laws and promoting criminal activity”.
Senator John Cornyn:
“We’re living in a time where the threats from our enemies are constantly evolving and it’s not enough to fight terrorism and crime in a reactionary manner. To protect our country and Americans, we must aggressively and proactively go after their funding streams, and by strengthening our money laundering laws, we can help curb the illegal flow of money to terrorist organizations, drug cartels and crime organizations that fund their illicit activity”.
Senator Sheldon Whitehouse:
“One of the best ways to track crime and serious threats to our country is to follow the money. That’s why we need to crack down on the range of tricks criminals and terrorists can use to launder their dirty money to sustain their illegal enterprises. I’m glad to join this bipartisan bill to bring our money laundering laws up to date”.
While the bill was lauded for crossing party lines to address the nation's pressing problem, experts warned that the bill, once enacted, may actually stifle current innovations in the financial world.
Center for New American Security (CNAS) report reveals:
“There is no more than anecdotal evidence that terrorist groups have used virtual currencies to support themselves".
Thus, questions of the bill’s necessity are becoming a concern to the Blockchain community.
According to Jerry Brito, Executive Director of Coin Center, Blockchain technology which underpins Bitcoin and other cryptocurrencies, is somehow as important as the web. While like the web which also attracts illegal activities, fighting those illegal actors should be down by reducing and not adding regulatory burden on digital currency companies.
"One particular challenge in this area is the requirement for a virtual currency firm to obtain licenses in all states in which it operates and maintain compliance consistent with both federal and applicable state standards where they are licensed to operate. With only a single federal registration for virtual currency firms, compliance costs would be more manageable for smaller firms, and regulators would be better able to oversee firms”.
Expect some form of regulation
Most government organizations are still exploring Blockchain and cryptocurrencies potential. Whether it be to augment existing innovation plans such as the case for the state of Illinois or the US Navy improving the security of their manufacturing process.
Truth is, different states have different stance on cryptocurrency. Lastly, it is only a matter of time until some sort of regulation is put in place for Bitcoin and ICOs as there’s still a growing interest in various government regulating bodies, especially the SEC and Senate.