The United States government announced that it has removed two provisions designed to address anti-money laundering (AML) concerns related to crypto assets from the National Defense Authorization Act (NDAA). The NDAA is known as legislation authorizing how the Department of Defense can use federal funds. Among the comprehensive list of provisions removed from the NDAA, two specifically outlined a comprehensive review and reporting system of crypto activities to combat illegal practices.
Noteworthy Development in the NDAA Process
The first provision regarding the process tasked the US Treasury Secretary with coordinating with banking and government regulators to establish a risk-focused review and revision system for financial institutions on crypto.
The second provision addressed the fight against anonymous crypto asset transactions, specifically those involving crypto mixing platforms for money laundering crimes. This step includes the preparation of a report detailing the volumes of crypto asset transactions associated with sanctioned institutions.
Additionally, the report will cover legal regulatory approaches adopted by other jurisdictions. Following these developments, the report is planned to guide the US government in implementing legal regulations for the crypto market.
US Steps Towards the Crypto Market
On July 28, the United States Senate announced it had accepted the provisions of the NDAA valued at $886 billion. Changes to the crypto market included elements from the Digital Asset Anti-Money Laundering Act introduced in 2022 and the Responsible Financial Innovation Act aimed at preventing another FTX disaster in the industry.
This law was proposed by a group of senators, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall. Recently, the US government continues to discuss issues related to alleged money laundering and terror financing through the use of crypto assets.
The US House of Representatives Financial Services Committee held a meeting on November 15 to discuss the so-called illegal activities occurring in the crypto ecosystem. During the meeting, a review was also made of how proactive centralized crypto exchanges and decentralized finance providers are in preventing money laundering and terrorist financing.