• The Digital Asset Anti-Money Laundering Act Of 2022 proposed by Senator Elizabeth Warren would classify custodial wallets, developers of non-custodial wallets, and cryptocurrency miners, validators or other nodes that may act to validate or secure third-party transactions, independent network participants and other validators with control over network protocols as money service businesses.
• The Act would also require financial institutions to prohibit handling, using or transacting with digital asset mixers, privacy coins and other anonymity-enhancing technologies, as specified by the secretary of the U.S. Treasury; and handling, using or transacting business with digital assets that have been anonymized.
• The enactment of the Act would infringe on the first amendment by requiring anyone writing software which enabled the sending, receiving and signing of bitcoin transactions to obtain a money transmitter license.
Yesterday, the U.S. Senate proposed the Digital Asset Anti-Money Laundering Act Of 2022, a bill that is deeply concerning to international human rights, unconstitutional, and in direct opposition to current U.S. consumer privacy regulations. This proposed bill is a cause for alarm for many in the technology, privacy, and security community due to the far-reaching implications it could have on user privacy.
Section three, part a of the Digital Asset Anti-Money Laundering Act Of 2022 would classify custodial wallets and “unhosted wallet providers,” likely meaning developers of non-custodial wallets, as well as cryptocurrency miners, validators or other nodes that may act to validate or secure third-party transactions, independent network participants and other validators with control over network protocols, as money service businesses. This portion of the bill would require anyone developing non-custodial wallets to obtain a license, and would infringe upon the first amendment due to the requirement of obtaining a money transmitter license.
Section three, part d of the Digital Asset Anti-Money Laundering Act Of 2022 would require financial institutions to prohibit handling, using or transacting with digital asset mixers, privacy coins and other anonymity-enhancing technologies, as specified by the secretary of the U.S. Treasury; and handling, using or transacting business with digital assets that have been anonymized. This would limit the ability of individuals to protect their own privacy, as well as the privacy of those they interact with, by making certain privacy-protecting technologies unavailable.
The Digital Asset Anti-Money Laundering Act Of 2022 would be a massive blow to consumer privacy and international human rights, and would severely hinder the development of privacy-focused technologies. It would be a massive step backwards for the state of privacy in the United States, and should not be allowed to pass.