United States Sen. Jack Reed sponsored a bipartisan bill introduced into the Senate on July 18 that would tighten Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and sanctions requirements for decentralized finance (DeFi). According to a news release on Reed’s website, the bill is titled the Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act.
The bill would subject DeFi operations to the same requirements as “other financial companies, including centralized crypto trading platforms, casinos, and even pawn shops.” The bill would make “anyone who controls that project” liable for the use of the DeFi service by sanctioned persons. Furthermore:
“If nobody controls a DeFi service, then — as a backstop — anyone who invests more than $25 million in developing the project will be responsible for these obligations.”
The bill would also “modernize” Treasury Department AML powers by extending them beyond the traditional financial system. According to the statement:
“As new technologies like cryptocurrency increasingly enable new ways to conduct financial transactions, it is critical to extend Treasury’s authority to crack down on illicit financial activity that may occur outside the banking sector.”
The bill also set new requirements for operators of crypto kiosks (or ATMs) to prevent their use in money laundering. Kiosk operators would be required to verify the identities of both counterparties in a transaction.
The bill has not been published at the time of writing. A member of Reed’s staff contacted by Cointelegraph could not say when the bill would be published. A text purporting to be the draft bill has been posted on GitHub.
Case in point:
The definition of “control” is so broadly worded that it’s meaningless. No thresholds, no specifics, just “control,” as determined by the Secretary of the Treasury. Completely and utterly unworkable.https://t.co/rVk26MJwfA
Crypto Twitter has wasted no time in condemning the bill. One commenter called it “an existential threat to DeFi” and a “nonstarter.” Another said that “imposing control responsibility for a $25mm investment is going to chill VC investment into DeFi b/c passive tokenholding does NOT equal control.”
The Crypto Council for Innovation said in a statement, “The proposal fails to offer actual guidance on technical ways for decentralized protocols to comply with BSA [Bank Secrecy Act] reporting requirements.” That organization favors an approach that “requires distinguishing various elements within the DeFi technology stack. It also involves leveraging the transparency and programmability inherent in blockchain systems to derive appropriate compliance measures unique to the crypto ecosystem.”
Amy James, founder of industry advocate Web3 Working Group, told Cointelegraph, “Sadly, the US is becoming less and less supportive of web3 innovation. […] Although some argue any amount of regulatory clarity is a win, it needs to be right or it’s not a long-term win. We commend these legislators on making an attempt to provide regulatory clarity, and we hope to see them adjust aspects of this bill based on industry feedback to make the US a long-term competitive market in web3.”
Sens. Mike Rounds, Mark Warner and Mitt Romney are cosponsors of the bill. Reed and Warner were cosponsors of a bill introduced by Sen. Elizabeth Warren — the Digital Asset Sanctions Compliance Enhancement Act — in March 2022.
A nationwide grooming gangs inquiry must “leave no stone unturned”, Kemi Badenoch has said as the Conservatives urged the government to ensure ethnicity and religious background are taken into account.
Ms Badenoch and shadow home secretary Chris Philp, appearing alongside a survivor and two parents of survivors/victims, called on the government to adopt draft terms of reference for the inquiry drawn up by the Conservatives with help from some grooming gangs victims and survivors.
The Tory leader said her party is willing to work alongside the government, and an inquiry needs to be undertaken on a cross-party basis as it is ultimately about the survivors, victims and their families.
The Conservatives’ terms of reference include ensuring the inquiry examines the ethnicity and religious background of offenders, a two-year time limit and a focus on extra-familial abuse.
They also want it to forward evidence to police and prosecutors where criminality is indicated.
In June, the government announced it would be launching a national inquiry into grooming gangs, representing a U-turn after previously accusing Reform and the Conservatives of jumping on a far-right bandwagon when they called for one earlier in the year after Labour announced five local inquiries.
More from Politics
Please use Chrome browser for a more accessible video player
0:29
‘I’d wake up with really bad bruises’
But a national inquiry has been delayed by rows about its scope, while both shortlisted chair candidates withdrew their candidacy following criticism by survivors of their careers as a police chief and a social worker.
A group of women also quit the inquiry’s victim liaison panel – one who was present with the Tories on Monday – as they accused the government of attempting to widen the inquiry’s remit to consider other forms of child sexual abuse.
Ms Badenoch said: “I want to be clear that a national inquiry must leave no stone unturned.
“It must investigate councils, the police and even the government if necessary.
“It must be time-limited, and it must consider the role of ethnicity, religion and other cultural factors.
“Baroness (Louise) Casey’s own report admitted that many of these cases are committed by people of Asian and Pakistani ethnicities.
“Her own report said that those who downplay the ethnicity of perpetrators are continuing to let down society, local communities and the victims. We agree.
“As I said, I have spoken to many survivors. We are speaking on their behalf.
“Their lives and their families’ lives have been turned upside down, so separate to this inquiry, the government must act now to ensure that they and their families are supported so they can heal.”
No political party owns high ground on this matter
Fiona Goddard was close to tears when she told me on Monday that pulling out of the grooming gang inquiry panel was “the most difficult decision of my life”.
The survivor of child sexual abuse in Oldham has spent years campaigning for a national inquiry – but sacrificed her chance to play a part in it because she felt it was moving in the wrong direction and broadening its scope.
The government insists that its scope has not changed, but time has marched on since two candidates to chair the inquiry pulled out in October, and the opposition has stepped into the void – offering their own version of what the inquiry should look like.
However, Kemi Badenoch’s call that “no stone should be left unturned” was reminiscent of her own party’s pledge in December 2018 when then Home Secretary Sajid Javid promised to investigate the ethnicity of grooming gangs with exactly the same words.
The subsequent review published in 2020 found that most group-based child abusers were white but also revealed the lack of data being collected on ethnicity, which the Conservatives promised to improve.
Five years on, Louise Casey criticised the lack of data in her rapid review published earlier this year.
Asked if her own government had done enough, the leader of the opposition pointed to initiatives but added, “We didn’t know everything we know now”.
The truth is, no political party owns the high ground on this matter – just as Fiona Goddard is first to say that no one survivor can speak for everyone.
There is division about how this inquiry moves forward, and there’s no evidence of political parties working together to bring unity.
What it needs more than anything is an independent chair who can pull it out of the hands of politicians.
Baroness Casey, known as a Whitehall troubleshooter, having worked on social issues for successive prime ministers since Tony Blair, is assisting with setting up the inquiry, but acknowledged it could now be “months” before a chair was appointed.
Fiona Goddard, one of the survivors who left the inquiries’ liaison panel, backed the Conservatives’ proposals as she said she had “lost faith in the ability of the government to make more meaningful progress”.
Mr Philp said a two-year time limit on the inquiry is essential as he said: “It can’t drag on for years and years.”
He said the Tories were being “constructive” and that dual nationals found to have been involved in grooming should have their British citizenship removed and be deported “with no exceptions”.
A Labour Party spokesman said: “The Conservatives’ record on this issue is clear: they had years to take action on this appalling scandal, yet time and time again they failed to do so.
“This Labour government accepted all the recommendations from Baroness Casey’s report and we are committed to a full, statutory, national inquiry to uncover the truth.
“It will be robust, rigorous and laser-focused on grooming gangs, and its scope will not change.
“The inquiry will direct and oversee local investigations, with the power to compel witnesses and summon evidence. And it will explicitly examine the background, ethnicity and culture of offenders.”
Scottish independence would reduce energy bills north of the border by more than a third, First Minister John Swinney has claimed.
However, the SNP leader was unable to clearly answer how his party would deliver independence if the UK government continues to refuse requests for a second referendum.
Mr Swinney once again made the case for Scotland leaving the UK, and taking full control over its natural resources, at an SNP campaign event in Glasgow on Monday.
Inspired by his party’s old “it’s Scotland’s oil” political slogan, the first minister stated: “It’s Scotland’s energy.”
Image: Pic: PA
He added: “We know from analysis produced for Ofgem that a different policy approach would enable Scotland to have the lowest wholesale electricity prices in Western Europe.
“As we set out in the paper published today, by selling that low-cost electricity into other markets at a profit; by increasing storage capacity, including pumped hydro storage; to end the folly of generators being paid not to produce electricity; and by removing unnecessary costs like the UK’s nuclear levy, we can deliver big benefits here in Scotland.
“That includes being able to lower household electricity bills by over one-third. A big saving for families across Scotland, offering the real hope that cost of living pressures will finally begin to ease.”
More on Energy
Related Topics:
Mr Swinney said lower energy bills would benefit schools and the NHS.
He added: “Think what that will mean for our National Health Service.
“Less money spent on energy bills means more money to spend on doctors and nurses, on more operations and appointments.”
When questioned on how he intends to deliver Scottish independence if the UK government refuses a second referendum, Mr Swinney said: “We’ve got to demonstrate emphatic support for the proposition of independence, and we do so by electing a majority of SNP MSPs at the election in May.”
Mr Swinney said he met Prime Minister Sir Keir Starmer on Friday, and warned the Labour leader he is at risk of becoming the new Margaret Thatcher.
The first minister said: “I left the prime minister in no doubt that unless he changes course, what we face is a second wave of 80s-style deindustrialisation, 80s-style economic devastation.
“Today, Sir Keir Starmer is an even less popular prime minister than Liz Truss – and that takes some doing.
“But if he does not change course on the energy profits levy, he will enter our national story as a second Thatcher, a second destroyer of industry, a second destroyer of communities.
“And Scotland will not forget.”
Please use Chrome browser for a more accessible video player
When questioned on the SNP’s “welcoming” position towards refugees amid growing numbers of protests about the issue, the first minister described the demonstrations outside asylum hotels as “appalling”.
He added: “There’s language on these banners that I just find absolutely wholly and totally contemptible and hostile.”
Mr Swinney acknowledged the growing popularity of Reform UK, but said he would “challenge” the party.
The first minister added: “I will go up against Reform in what they say.
“I will stand firm in exercising that political leadership, and I’m quite sure I speak for the majority of people in Scotland in the process.”
Young people could lose their right to universal credit if they refuse to engage with help from a new scheme without good reason, the government has warned.
Almost one million will gain from plans to get them off benefits and into the workforce, according to officials.
It comes as the number of young people not in employment, education or training (NEET) has risen by more than a quarter since the COVID pandemic, with around 940,000 16 to 24-year-olds considered as NEET as of September this year, said the Office for National Statistics.
That is an increase of 195,000 in the last two years, mainly driven by increasing sickness and disability rates.
The £820m package includes funding to create 350,000 new workplace opportunities, including training and work experience, which will be offered in industries including construction, hospitality and healthcare.
Around 900,000 people on universal credit will be given a “dedicated work support session”.
That will be followed by four weeks of “intensive support” to help them find work in one of up to six “pathways”, which are: work, work experience, apprenticeships, wider training, learning, or a workplace training programme with a guaranteed interview at the end.
However, Work and Pensions Secretary Pat McFadden has warned that young people could lose some of their benefits if they refuse to engage with the scheme without good reason.
The government says these pathways will be delivered in coordination with employers, while government-backed guaranteed jobs will be provided for up to 55,000 young people from spring 2026, but only in those areas with the highest need.
However, shadow work and pensions secretary Helen Whately, from the Conservatives, said the scheme is “an admission the government has no plan for growth, no plan to create real jobs, and no way of measuring whether any of this money delivers results”.
She told Sky News the proposals are a “classic Labour approach” for tackling youth unemployment.
Please use Chrome browser for a more accessible video player
7:57
Youth jobs plan ‘the wrong answer’
“What we’ve seen today announced by the government is funding the best part of £1bn on work placements, and government-created jobs for young people. That sounds all very well,” she told Sunday Morning with Trevor Phillips.
“But the fact is, and that’s the absurdity of it is, just two weeks ago, we had a budget from the chancellor, which is expected to destroy 200,000 jobs.
“So the problem we have here is a government whose policies are destroying jobs, destroying opportunities for young people, now saying they’re going to spend taxpayers’ money on creating work placements. It’s just simply the wrong answer.”
Ms Whately also said the government needs to tackle people who are unmotivated to work at all, and agreed with Mr McFadden on taking away the right to universal credit if they refuse opportunities to work.
But she said the “main reason” young people are out of work is because “they’re moving on to sickness benefits”.
Ms Whately also pointed to the government’s diminished attempt to slash benefits earlier in the year, where planned welfare cuts were significantly scaled down after opposition from their own MPs.
The funding will also expand youth hubs to help provide advice on writing CVs or seeking training, and also provide housing and mental health support.
Some £34m from the funding will be used to launch a new “Risk of NEET indicator tool”, aimed at identifying those young people who need support before they leave education and become unemployed.
Monitoring of attendance in further education will be bolstered, and automatic enrolment in further education will also be piloted for young people without a place.