• The Crypto Council for Innovation has released a statement criticizing the US Senate’s new AML bill, saying that it fails to provide a workable framework for illicit finance in DeFi.
• The CCI notes that the proposed legal requirements included in the bill are “arbitrarily placed on persons” and do not address illicit finance in an effective way.
• The council recommends leveraging the transparency and programmability of blockchain systems to develop appropriate compliance measures unique to crypto.
US Senate’s New Bill Criticized by Crypto Council
The Crypto Council for Innovation (CCI) has released a statement criticizing the new Anti-Money Laundering (AML) bill introduced in the US Senate regarding decentralised finance (DeFi). According to the CCI, this bill fails to provide a workable framework for illicit finance activities in this sector.
Bill Faultsed For Arbitrary Legal Requirements
The CCI notes that the proposed legal obligations highlighted in the bill are “arbitrarily placed on persons” who have no actual way to influence protocols once they are deployed. Furthermore, they claim that these proposals go “in the opposite direction” of what should be done when it comes to controlling illicit finance activities.
Leveraging Blockchain Systems Proposed
The council believes that leveraging blockchain systems, which offer transparency and programmability, is necessary in order to develop appropriate compliance measures unique to crypto. This would help effectively address concerns about money laundering and other illicit financial activities taking place within DeFi protocols or using cryptocurrency ATMs.
National Security Concerns Addressed
The council acknowledges that tackling illicit finance is a legitimate national security concern, especially since its volume is small compared with traditional financial services (TradFi). Thus, they recommend developing solutions based on blockchain systems instead of simply placing arbitrary legal obligations on individuals involved with DeFi protocols or cryptocurrency ATMs.
Conclusion
In conclusion, while tackling money laundering is important from a national security standpoint, simply placing arbitrary legal requirements on those involved with DeFi will not achieve this goal effectively. Instead, it is essential that we leverage blockchain systems to develop specific solutions which can tackle this problem more efficiently and sustainably.
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