This morning, 12 Democrats in the Senate published a six -page framework for the legislation on the structure of the digital asset market in which they described their plan to combat illicit finance while protecting the financial confidentiality of users.
The group of democrats, which included the member of the Senate Banking, Ruben Gallego (AZ), Kirsten Gillibrand (NY) and Catherine Cortez Masto (NV), said on the first page of the document that digital asset legislation should be guided by certain values, includes “the protection of financial confidentiality while refusing the access of the actors of the bad system”.
In the fifth section of the frame, they described what it looks like.
The plan included the following points:
- Demand that digital asset platforms are part of Fincen as “financial institutions” under the Bank Secrecy Act (BSA), while adopting anti-whiteness / fight against terrorism funding (AML / CFT)
- Approach the use by the bad players of the DEFI platforms to bypass illicit financial controls
- Make sure that cryptographic platforms serving American customers comply with the sanctions and requirements of LMA / CFT, even if they are domiciled abroad
- Shape ecosystems to isolate non-compliant platforms that allow illegal activity
Intentionally clear language?
What is “the fight against the use of DEFI platforms” by bad actors “like? What role will American regulators play in “shaping ecosystems to isolate non-compliant platforms”?
These questions remain unanswered according to this framework, which is notably less detailed and complete than the project of the law on clarity that the Senate banks committee recently published.
What comes to mind, I think that the ecosystems of the “digital active ingredients” of the American government is that it is pressure for the implementation of a digital identifier which only allows “good actors” to transform. Former CFTC president Tim Massad said he was in favor of such a program in an interview that I carried out with him earlier this year.
Fortunately, it would be almost impossible to implement technically for Bitcoin. The intelligent contract blockchain networks, on the other hand, would be more easily sensitive to the censorship of transactions, because the government could demand that intelligent contracts on the network include certain rules and stipulations within the code which prohibiting the bad actors of the transaction.
What Democrats should do
If democrats seek to engage in the regulation of bitcoin and cryptography of good faith, they should be more precise on their intentions and include more details on the way in which they plan to fight against illegal finance while preserving the confidentiality of users.
And in their next series of messages, they should clearly define how they plan to “shape ecosystems” as well as provide clear definitions for what they mean by terms like “platforms”. For example, when they say “platforms”, do they refer to centralized entities which contain private keys to users like Coinbase or Kraken, or does the term also include services like Samurai Wallet or Tornado Cash?
These are questions to answer if bitcoin and defenders of cryptography and enthusiasts must believe that Democrats in fact want to consecrate the law on the law for users of Bitcoin and Crypto to preserve their privacy.
