News.bitcoin.com has reported on bill S.1241 multiple times since the proposed law was introduced by U.S. bureaucrats back in June. According to The Satoshi Revolution author, Wendy McElroy, the bill is a “pit bull assault on bitcoin freedom.” Now, this week without causing much attention, the U.S. Committee of the Judiciary members gathered to discuss digital currency implications towards AML/KYC regulatory guidelines. However, during the meeting, it is clear from the recorded video that the words “financial institution” will be amended to cover a much broader definition.
Last week on November 28 a revision was made to the U.S. bill S.1241 called “Modernizing AML Laws to Combat Money Laundering and Terrorist Financing.” During the U.S. Senate committee hearing, the bill’s words and the representatives bolstering the proposed law amended a critical definition of what a ‘financial institution’ is within the suggested statutes.
Bill S.1241: Amending the Definition of a Financial Institution
U.S. bill S.1241 is sponsored by Senator Chuck Grassley of Iowa and Senator Diane Feinstein of California.
Instead of utilizing the definition of a ‘financial institution’ which includes business models like banks and credit unions, S.1241’s amendment in Section 5312(a) of title 31, United States Code states that the definition now includes, “an issuer, redeemer, or cashier of prepaid access devices, digital currency, or any digital exchanger or tumbler of digital currency.”
U.S. bill S.124, “Modernizing AML Laws to Combat Money Laundering and Terrorist Financing.”
‘Criminalizing’ the Concealment of Digital Currencies
Moreover, during the hearing Senator Feinstein explains the bill “criminalizes intentionally concealing ownership or control of a bank account.” This includes concealing digital currencies or other similar “prepaid instruments” as Section 5312 states;
A ‘prepaid access device’ means an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.
U.S. Law Enforcement Is at a Crossroads
The Senator from Minnesota, Amy Klobuchar, asked the former U.S. Treasury special agent, John Cassara, what he thinks about the current “transition from cash to digital cash.” Klobuchar is interested in his opinion on whether or not law enforcement can track money laundering cases tied to cryptocurrencies. Cassara who has spent most of his career investigating money laundering, trade fraud, and international smuggling cases says he’s pleased he didn’t have to deal with digital currencies during his tenure.
“I’m just glad I had my career when I did because I don’t know what I’d do trying to follow the money when it comes to digital currencies, it’s extremely, extremely challenging,” Cassara explains.
I think if you look at the metrics, the metrics suggest today that digital currencies are a small fraction of the threat that we face – That’s not to say it’s gonna be the case in 5-10 years from now – We’re right at a crossroads, and it’s going to be very, very interesting to see what goes forward.
It’s safe to say bitcoin proponents will be watching this bill very closely with its revised definitions. The way the proposed law is being discussed by bureaucrats may concern bitcoiners who believe in privacy. Especially when a U.S. Senator suggests “criminalizing the intent of concealed ownership” of digital currencies. Further, as the bill has progressed skeptics find it interesting definitions are being changed and snuck into the proposed legislation in a sneaky manner. However, U.S. Senators got a bill passed last night that also ‘quietly added $1 trillion’ to the country’s deficit in the same fashion.