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.
Wes Streeting has suggested he is confident the government will now win a crunch vote on welfare cuts after Sir Keir Starmer made a number of concessions to prevent a damaging rebellion.
The health secretary told Sunday Morning With Trevor Phillips the alterations to the controversial welfare bill meant those in receipt of benefits now had “peace of mind”.
Asked whether he was confident the government would now win a vote on the reforms scheduled for Tuesday, Mr Streeting said: “Yes.
“I think the changes that were made this week have put us in a much better position, not just on the vote on Tuesday, but on the substance of the package – because as a result of the changes, it means anyone watching this morning who’s in receipt of PIP, Personal Independence Payments, now has the peace of mind of knowing that their situation is protected.”
More than 120 Labour MPs had signalled they were prepared to vote down the bill next week after they signed an amendment that would have stopped its progress through parliament – citing concerns about the impact on the most vulnerable and the lack of proper consultation with disabled groups.
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The scale of the rebellion – and the fact it spanned all wings of the party – alarmed Downing Street and led to Sir Keir making a number of changes to diffuse the anger.
Originally, the bill set out to tighten the eligibility criteria for PIP – money that is given to people, some of whom are in work, who have extra care or mobility needs as a result of a disability.
People who claim it are awarded points depending on their ability to do certain activities, such as washing and preparing food, which influences how much they will receive.
Currently claimants need to score a minimum of eight points across a range of tasks to qualify for the daily living element (there is a mobility element that is not affected by the plans). Under the new rules people will need to score a minimum of four points in at least one activity to qualify.
However, the changes made by Sir Keir mean existing PIP claimants will now be exempted from the stricter new criteria.
Alterations to Universal Credit, another type of benefit, mean that the health top-up will only be cut and frozen for new applications, as opposed to existing ones.
Mr Streeting declined to say whether he thought those who decide to vote against the bill should lose the party whip, which would force them to sit as an independent MP in the Commons.
He said it was “not my decision”, but added that there was an “expectation that Labour MPs vote for the whip”.
In a series of interviews over the weekend, the prime minister acknowledged there had been some mishandling of the welfare debate and said he was “heavily focused” on world affairs before he was forced to U-turn on his welfare bill.
In a piece in The Sunday Times, Sir Keir said he was occupied with the G7 and NATO summits and the escalating tensions in the Middle East for much of the past two weeks.
“Getting it right is more important than ploughing on with a package which doesn’t necessarily achieve the desired outcome,” he said, adding that all the decisions made were his and that “I take ownership of them”.
It was only 10 days ago that embattled Welfare Secretary Liz Kendall, trying to convince MPs to back her reforms, said ministers were “firm in our convictions”.
People on Personal Independence Payments (PIP) and universal credit were too often being “written off”, while the welfare bill was becoming unsustainable.
After an unprecedented rebellion by Labour MPs forced the prime minister into a significant retreat, today sees an interesting shift in those convictions.
Ms Kendall’s colleague Wes Streeting, who was drafted onto calls with angry backbenchers, tells Sky News he didn’t want disabled people in his constituency surgeries on a Friday, telling him they were worse off when that was not the intention.
This is exactly what many Labour MPs and disability groups were arguing was inevitable if current claimants were stripped of their benefits.
Sir Keir Starmer, in a series of Sunday newspaper interviews in which he reflects on mistakes, says he now believes there was no point ploughing ahead with something which “doesn’t necessarily achieve the desired outcome”.
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Having rushed forward these reforms to save £5bn in the spending review, it now seems ministers are admitting the package needed more thought.
The welfare bill is rising sharply, and many voters broadly support the idea of tackling it.
But even if the draft legislation, which will affect new benefit claimants only, is voted through (and that’s still an “if'”, with dozens of Labour MPs still weighing it up), this debacle – for many MPs at least – goes to the heart of whose side the government is on.
The health secretary has told Sky News the government’s plans to tackle obesity by introducing a health food standard for supermarkets are a “world-first approach” and not “nanny statism”.
As part of an initiative aimed at taking some pressure off the NHS, food retailers and manufacturers will “make the healthy choice the easy choice” for customers in the UK, which has the third-highest adult obesitylevels in Europe.
Supermarkets will be required to report sales data and those that fail to hit targets could face financial penalties, suggested Nesta, the innovation agency which initially developed the policy.
Speaking on Sunday Morning With Trevor Phillips, Wes Streeting said: “Instead of traditional nanny statism, where we regulate more heavily on price or marketing on what’s sold, we’re taking a world-first approach, which is working with supermarkets using data they already collect about the nutritional value of their shopping baskets and shopping trolleys, the average shop.
“We’re going to work with them to reduce the amount of unhealthy food in trolleys and baskets by setting targets on the healthy value of your shopping trolleys and baskets.”
He said if obese people cut their calorie intake “by about 216 calories a day – the equivalent of a bottle of fizzy coke, we’d halve obesity”.
“We’ve got one in five kids leaving primary school with obesity, it’s costing the NHS £11bn a year, and obesity has doubled since the 1990s,” he added.
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He also said: “If we reduce calorie intake in this country by just 50 calories a day, that would lift 340,000 children out of obesity.”
Mr Streeting said supermarkets will decide through the combination of where they put their products, how they do price promotions, and what products they choose to put on the shelves.
“They will work with us to make sure that we nudge people in the right direction, without any of us even noticing,” he added.
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2:40
UK may have reached ‘peak obesity’
Businesses will be free to choose how to implement the new healthy food standard, which aims to make their customers’ average shopping healthier.
Measures could include reformulating products and tweaking recipes, changing shop layouts, offering discounts on healthy foods, or changing loyalty schemes to promote healthier options.
Obesity is one of the root causes of diabetes, heart disease and cancer.
The new scheme, announced on Sunday by the Department for Health and Social Care, is part of the forthcoming 10-Year Health Plan, through which the government is seeking to shift from sickness to prevention to alleviate the burden on the NHS.
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1:22
Weight loss drugs ‘changing way we see obesity’
An ‘important step’
Michelle Mitchell, Cancer Research UK’s chief executive, said: “Businesses can play a major role in supporting people to make healthy choices, and this important step could help to reduce rising obesity rates.
“Being overweight or obese is the second biggest cause of cancer in the UK, and is linked with 13 different types of the disease.
“The UK government must introduce further bold preventative policies in both the upcoming 10-year Health Plan and National Cancer Plan, so that more lives can be saved from cancer.”
Image: Tesco is among the supermarkets which have welcomed the government’s announcement. Pic: iStock
Some of the UK’s biggest supermarkets appear to have reacted positively to plans for a new standard of healthy food, with Ken Murphy, Tesco Group CEO, saying: “All food businesses have a critical part to play in providing good quality, affordable and healthy food.
“At Tesco, we have measured and published our own healthier food sales for a number of years now – we believe it is key to more evidence-led policy and better-targeted health interventions.
“That’s why we have called for mandatory reporting for all supermarkets and major food businesses and why we welcome the government’s announcement on this.
“We look forward to working with them on the detail of the Healthy Food Standard and its implementation by all relevant food businesses.”
Simon Roberts, chief executive of Sainsbury’s, said: “We’re passionate about making good food joyful, accessible and affordable for everyone and have been championing the need for mandatory health reporting, across the food industry for many years.
“Today’s announcement from government is an important and positive step forward in helping the nation to eat well.
“We need a level playing field across the entirety of our food sector for these actions to have a real and lasting impact.”