FCC RegUpdate

On July 27, 2023, the US Senate reintroduced the Digital Asset Anti-Money Laundering Act of 2023. This act aims to close gaps in the existing AML/CFT framework by preventing digital assets from being misused to finance illegal activities.

This bill has received endorsements from the Bank Policy Institute, Massachusetts Bankers Association, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, Massachusetts Sheriffs’ Association, AARP, National Consumer Law Center (on behalf of low-income clients), and the National Consumers League.

The Act aims to:
• Extend Bank Secrecy Act (BSA) obligations, including Know Your Customer (KYC) requirements, to digital asset wallet providers, miners, validators, and other network participants who validate, secure, or facilitate digital asset transactions.
• Mandate banks and MSBs to verify customer and counterparty identities, maintain records, and file reports for specific digital asset transactions involving unhosted wallets or wallets hosted in non-BSA-compliant jurisdictions.
• Prohibit financial institutions from using or transacting with digital asset mixers and other technologies that enhance anonymity.
• Mitigate the risks of illicit finance associated with digital asset ATMs by requiring digital asset ATM owners and administrators to regularly submit and update the physical addresses of their owned or operated kiosks and verify customer identities.
• Establish an AML/CFT compliance examination and review process within the Treasury Department for MSBs and other digital asset entities to ensure the enforcement of BSA compliance.
• Mandate any US citizen who conducts transactions in digital assets worth more than USD $10,000 through one or more offshore accounts to file a Foreign Bank Account Report (FBAR) with the Internal Revenue Service.