Lawmakers’ fear and doubt drives proposed crypto regulations in US
Real bipartisan legislative efforts are rare in Washington, DC, these days, but Democratic Senators Elizabeth Warren and Joe Manchin and Republican Senators Lindsey Graham and Roger Marshall have managed to come together to co-sponsor a bill focused on crypto crime.
According to the senators, the Digital Asset Anti-Money Laundering Act of 2023 aims to close loopholes in the nation’s Anti-Money Laundering rules. The bill would amend the Bank Secrecy Act and would designate a diverse range of digital asset providers as financial institutions.
The Bank Secrecy Act establishes program, recordkeeping and reporting requirements for national banks, federal savings associations, federal branches and agencies of foreign banks. Digital asset providers would be required to adhere to many of the same regulations as traditional banks.
Warren introduced the legislation to the United States Senate on July 27, 2023, on behalf of herself and Senators Joe Manchin, Roger Marshall and Lindsey Graham. The bill was then referred to the Senate Committee on Banking, Housing and Urban Affairs. It hasn’t been voted on by the entire Senate or sent to the U.S. House of Representatives for consideration. Nor has President Biden signed it, and it is not a matter of law at this time.
The legislation would add several types of cryptocurrency providers to U.S. regulators’ list of financial institutions. These include unhosted wallet providers, digital asset miners and validators or other nodes that validate third-party transactions, miner extractable value searchers, other validators or network participants with control over network protocols, or just about anyone else who facilitates or provides services related to exchange, sale, custody or lending of digital assets.
All these organizations and individuals would be subject to the same regulations currently applied to financial institutions in the United States. The bill does include exceptions for those who use distributed ledger, blockchain technology or similar technologies for internal business purposes.
Crypto under federal review
If the bill becomes law, within 18 months of its enactment, the U.S. Treasury’s Financial Crimes Enforcement Network would announce that any U.S. person with $10,000 in digital assets or one or more digital assets overseas would have to file a report. Within the same timeframe, the U.S. Treasury would establish controls to mitigate unlawful financial risks associated with digital asset mixers and anonymity-enhanced cryptocurrency.
Within two years of the bill’s enactment, the Treasury, in consultation with the Conference of State Bank Supervisors, will create a risk-focused examination and review process for those digital asset participants newly designated as financial institutions. They would determine if efforts to stop money laundering and to counter crypto-funded terrorism are adequate and if crypto providers and facilitators are compliant with the new rules. Subsequently, within the same time frame, the Securities and Exchange Commission and the Commodity Futures Trading Commission will consult with the Treasury on exactly the same matters.
What about my favorite BTC kiosk?
The next part of the bill is focused on digital asset kiosks. Within 18 months of the bill’s passage, FinCEN will require digital asset kiosk (ATM) owners and administrators to submit and update the physical address of their kiosks every 90 days. The kiosk owners will also need to verify the identity of each customer using a valid form of government-issued identification, and they will have to collect the name and physical address of each counterparty to each transaction.
Within 180 days, FinCEN will issue a report about any digital asset kiosks that haven’t been registered. The report would include an estimate of the number of unregistered kiosks, their locations and an assessment of additional resources that FinCEN might need to be able to investigate them.
Within a year of the enactment of the legislation, the U.S. Drug Enforcement Agency would issue a report identifying recommendations to reduce drug trafficking and money laundering associated with digital asset kiosks.
Crypto industry impact
Grant Fondo, co-chair of Goodwin’s digital currency and blockchain practice and a former Assistant U.S. attorney, tells Magazine that “the bill is an attempt to pull more players in the digital asset industry within regulatory control, to close gaps in what some in Congress see as not covered under the current regulatory regime.”
Fondo believes that, if passed, the legislation would have the practical effect of killing decentralized finance in the U.S. by applying an unworkable regime on DeFi protocols. Fondo sees the legislation as imposing a burden on validators and miners and also questions how realistic it would be to impose bank-like requirements on a software company validating blockchain transactions.
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Hadas Jacobi, an attorney in the Financial Industry Group at Reed Smith who previously worked as a financial enforcement regulator for the State of New York, agrees. According to Jacobi, the act would apply Bank Secrecy Act requirements, depending on the context, to crypto participants that are not financial institutions.
“The act could be read as applicable to programmers and other tech providers who create the framework for financial services operations rather than provide services themselves,” Jacobi says.
Although Jacobi believes there is a need for legislative clarity in the space, she questions whether the primary intent of the legislation — the crypto sector’s threat to national security — is even relevant. Jacobi says that on-point regulation of cryptocurrency and digital asset services providers is necessary, but digital assets do not threaten national security.
“A general statement that digital assets pose a threat to U.S. national security, however, would be both inaccurate and short-sighted. Bad actors in the digital asset space pose a global threat from both a national security and a financial stability standpoint — but the digital asset industry and its underlying technology do not,” Jacobi says.
What the politicians are saying
In a written statement, Senator Marshall says that the bill addresses U.S. concerns about national security.
“This legislation is a matter of national security. Mastermind hackers from adversarial countries like Iran, Russia, and North Korea are committing cybercrimes against the United States to the tune of BILLIONS of dollars; they must be held accountable. The reforms outlined in our legislation will help us fight back and secure our digital assets by using proven methods that our domestic financial institutions have been complying with for years,” Marshall states.
Marshall says that the legislation would extend Bank Secrecy Act responsibilities to include Know Your Customer requirements for those affected, would address a “major gap” with unhosted digital wallets, would direct FinCEN to issue guidance on financial institutions to mitigate digital asset risks, would strengthen enforcement of BSA compliance, would extend BSA foreign bank account rules to include digital assets and would mitigate illicit finance risks of digital asset ATM’s.
Warren argues that U.S. authorities have warned that crypto is being used for all types of crimes and for antagonistic nations to avoid U.S. sanctions.
“Rogue nations like Iran, Russia and North Korea have used digital assets to launder stolen funds, evade American and international sanctions, and fund illegal weapons programs,” Warren says.
Suggesting that the act will help to subvert these efforts, Warren focuses her statement on North Korea’s missile program.
“Nearly half of North Korea’s missile program, for example, is estimated to be funded by cybercrime and digital assets. In 2022, illicit digital asset transactions totaled at least $20 billion — an all-time high,” Warren writes.
Manchin asked Democrats and Republicans to come together and vote for the bill. “Our bipartisan legislation would curtail these security risks and require cryptocurrency platforms to abide by the same Anti-Money Laundering rules that banks have to follow. I urge my colleagues on both sides of the aisle to support this common-sense legislation to protect Americans by preventing bad actors from using cryptocurrencies to finance their criminal activities,” Manchin says.
Fondo doesn’t see how the Anti-Money Laundering Act could minimize risks to national security but does recognize how the bill might address issues associated with anonymity-enhanced cryptocurrency.
Still, he would like to see this legislative effort well thought out before passing the bill. “No one wants terrorists and criminals masking their financial transactions. But conversely, privacy is a rare commodity, so it’s important to properly balance it with national security,” Fondo says.
Jacobi is concerned that overregulation will lead to redundancy and excessive costs that will drain the industry. She says that the act would direct FinCEN to regulate digital service providers as money transmission businesses, although she believes that they have already been doing that since 2013. Furthermore, she says that most state regulators have been examining and registering them for almost as long.
“The Act has the potential to upset the balance of the existing U.S. dual state and federal regulatory regime by creating redundancies in the supervision and examination of money transmission businesses, not to mention exposing the digital asset industry to resource-draining, duplicative enforcement actions,” Jacobi says.
Will the bill become law?
It’s anybody’s guess. The House of Representatives is just getting back on its feet after struggling for weeks to elect a new speaker.
The U.S. Senate still requires a supermajority vote to approve almost any piece of legislation, and all the while, members of Congress and President Joe Biden are hyper-focused on geopolitical matters like the Israel/Hamas conflict and the war in Ukraine.
Also, most U.S. federal-level politicians are about to enter the 2024 election season, where control of the Senate, the House of Representatives and the Presidency are all up for grabs.
Controversial legislation will certainly stall until after the election, but a potentially popular crypto bill might just be palatable to candidates on both sides of the aisle to find its way onto the president’s desk. If the Digital Asset Anti-Money Laundering Act were to become law, many cryptocurrency providers would have to learn how to comply with the same regulations as traditional financial institutions.
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‘Shameful’ that black boys in London more likely to die than white boys, says Met Police chief
It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.
In a wide-ranging interview with Sunday Morning with Trevor Phillips, the commissioner said that relations with minority communities are “difficult for us”, while also speaking about the state of the justice system and the size of the police force.
Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.
“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”
He said the “vast majority” of the force are “good people”.
However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”
Sir Mark, who also leads the UK’s counter-terrorism policing, said black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.
“That’s, I think, shameful for the city,” he admitted.
“The challenge for us is, as we reach in to tackle those issues, that confrontation that comes from that reaching in, whether it’s stop and search on the streets or the sort of operations you seek.
“The danger is that’s landing in an environment with less trust.
“And that makes it even harder. But the people who win out of that [are] all of the criminals.”
Met Police Commissioner Sir Mark Rowley
The commissioner added: “I’m so determined to find a way to get past this because if policing in black communities can find a way to confront these issues, together we can give black boys growing up in London equal life chances to white boys, which is not what we’re seeing at the moment.
“And it’s not simply about policing, is it?”
Sir Mark said: “I think black boys are several times more likely to be excluded from school, for example, than white boys.
“And there are multiple issues layered on top of each other that feed into disproportionality.”
‘We’re stretched, but there’s hope and determination’
Sir Mark said the Met is a “stretched service” but people who call 999 can expect an officer to attend.
“If you are in the middle of the crisis and something awful is happening and you dial 999, officers will get there really quickly,” Sir Mark said.
“I don’t pretend we’re not a stretched service.
“We are smaller than I think we ought to be, but I don’t want to give a sort of message of a lack of hope or a lack of determination.”
“I’ve seen the mayor and the home secretary fighting hard for police resourcing,” he added.
“It’s not what I’d want it to be, but it’s better than it might be without their efforts.”
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How police tracked and chased suspected phone thief
‘Close to broken’ justice system ‘frustrating’ and ‘stressed’
Sir Mark said the criminal justice system was “close to broken” and can be “frustrating” for others.
“The thing that is frustrating is that the system – and no system can be perfect – but when the system hasn’t managed to turn that person’s life around and get them on the straight and narrow, and it just becomes a revolving door,” he said.
“When that happens, of course that’s frustrating for officers.
“So the more successful prisons and probation can be in terms of getting people onto a law-abiding life from the path they’re on, the better.
“But that is a real challenge. I mean, we’re talking just after Sir Brian Leveson put his report out about the close-to-broken criminal justice system.
“And it’s absolutely vital that those repairs and reforms that he’s talking about happen really quickly, because the system is now so stressed.”
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Leveson explains plans to fix justice system
Challenge to reform the Met
The Met chief’s comments come two years after an official report found the force is institutionally racist, misogynistic and homophobic.
Baroness Casey was commissioned in 2021 to look into the Met Police after serving police officer Wayne Couzens abducted, raped and murdered Sarah Everard.
She pinned the primary blame for the Met’s culture on its past leadership and found stop and search and the use of force against black people was excessive.
At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Baroness Casey insisted the Met deserved.
However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.
A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.
Watch the full interview on Sunday Morning with Trevor Phillips from 8.30am on Sunday.
Labour’s largest union donor, Unite, has voted to suspend Deputy Prime Minister Angela Rayner over her role in the Birmingham bin strike row.
Members of the trade union, one of the UK’s largest, also “overwhelmingly” voted to “re-examine its relationship” with Labour over the issue.
They said Ms Rayner, who is also housing, communities and local government secretary, Birmingham Council’s leader, John Cotton, and other Labour councillors had been suspended for “bringing the union into disrepute”.
There was confusion over Ms Rayner’s membership of Unite, with her office having said she was no longer a member and resigned months ago and therefore could not be suspended.
But Unite said she was registered as a member. Parliament’s latest register of interests had her down as a member in May.
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The union said an emergency motion was put to members at its policy conference in Brighton on Friday.
Unite is one of the Labour Party’s largest union donors, donating £414,610 in the first quarter of 2025 – the highest amount in that period by a union, company or individual.
The union condemned Birmingham’s Labour council and the government for “attacking the bin workers”.
Mountains of rubbish have been piling up in the city since January after workers first went on strike over changes to their pay, with all-out strike action starting in March. An agreement has still not been made.
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Rat catcher tackling Birmingham’s bins problem
Ms Rayner and the councillors had their membership suspended for “effectively firing and rehiring the workers, who are striking over pay cuts of up to £8,000”, the union added.
‘Missing in action’
General secretary Sharon Graham told Sky News on Saturday morning: “Angela Rayner, who has the power to solve this dispute, has been missing in action, has not been involved, is refusing to come to the table.”
She had earlier said: “Unite is crystal clear, it will call out bad employers regardless of the colour of their rosette.
“Angela Rayner has had every opportunity to intervene and resolve this dispute but has instead backed a rogue council that has peddled lies and smeared its workers fighting huge pay cuts.
“The disgraceful actions of the government and a so-called Labour council, is essentially fire and rehire and makes a joke of the Employment Relations Act promises.
“People up and down the country are asking whose side is the Labour government on and coming up with the answer not workers.”
Piles of rubbish built up around Birmingham because of the strike over pay
Sir Keir Starmer’s spokesman said the government’s “priority is and always has been the residents of Birmingham”.
He said the decision by Unite workers to go on strike had “caused disruption” to the city.
“We’ve worked to clean up streets and remain in close contact with the council […] as we support its recovery,” he added.
A total of 800 Unite delegates voted on the motion.
Nearly 60 Labour MPs have called on David Lammy and the Foreign Office to immediately recognise Palestine as a state.
A mix of centrist and left-wing MPs, including some committee chairs, wrote to the foreign secretary this week to say “by not recognising [Palestine] as a state, we undermine our own policy of a two-state solution and set an expectation that the status quo can continue and see the effective erasure and annexation of Palestinian territory”.
The 59 MPs suggest the government pursue five different measures to prevent the Israeli government from carrying out its Rafah plan, adding that they believed Gaza was being “ethnically cleansed” – a claim vehemently denied by Israel.
The letter was organised by Labour Friends of Palestine and the Middle East group.
Palestinians ask for food from a charity kitchen in Gaza on 7 July. Pic: Reuters
It states that the Israeli plan, which would see the “population transfer to the southern tip of Gaza in preparation for deportation outside the strip”, is an accurate description, but that they believe a clearer way to describe it is the “ethnic cleansing of Gaza”.
Israeli officials have said they want to separate the civilian population from Hamas, which still controls parts of Gaza and holds dozens of hostages abducted in the October 7 attack that triggered the war 21 months ago.
Emmanuel Macron discussed recognising Palestine as a state at a joint news conference with Sir Keir Starmer on Thursday – the same day the letter was signed.
The French president said: “Today, working together in order to recognise the state of Palestine and to initiate this political momentum is the only path to peace.”
While France has not yet recognised a Palestinian state yet, Norway, Ireland and Spain coordinated their recognition last year.
The letter demands ministers take five different measures to:
• Recognise the state of Palestine
• Continue support for the UN Agency for Palestinian Refugees (UNRWA)
• Secure the release of hostages
• Press for the full and unhindered resumption of humanitarian aid
• Fully review and place restrictions on trade with and financial support of illegal Israeli settlements in the West Bank
The government says it is already providing funding for the UNRWA and working to secure the release of hostages held by Hamas, but immediate recognition of Palestinian statehood will be a much more controversial move.
Sky News understands this is the second time MPs have formally called on the government to immediately recognise the state of Palestine, with previous letters signed by some parliamentary aides and even junior ministers.
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MPs call for Ukraine-style visas for Gazans
‘At least 798 killed’ at Gaza aid points
Ministers have indicated their plan to recognise Palestine would be “at a time that is most conducive to the peace process” without further clarity of when that might be.
They have also indicated that it would not be suitable to speculate about future sanctions, as this could reduce their impact.
A Foreign Office spokesperson said: “Since day one, this government has been clear that we need to see an immediate ceasefire, the release of all hostages cruelly detained by Hamas, better protection of civilians, much-needed food aid, medicines, shelter and other supplies immediately being allowed to enter Gaza, and a path to long-term peace and stability.
“The situation on the ground in Gaza is horrendous – for the hostages and for Palestinians – and we urgently want to see a deal done, to end the suffering on all sides.
“We are committed to recognising a Palestinian state and to doing so when will have most impact in support of a peace process. We continue to provide lifesaving aid to supporting Palestinians in Gaza and the West Bank, and to work closely in support of the Palestinian Authority.”
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