U.S. House Passes Crypto Illicit Finance Bill That’s Likely to be Rebuffed in Senate

As an experienced financial analyst with a background in following the cryptocurrency industry, I believe that the recent approval of another crypto bill in the US House of Representatives is a significant step, albeit a political one. The bill, aimed at establishing a working group to investigate the use of digital assets in terrorism and money laundering, is unlikely to become law without a Senate counterpart. However, it underscores the growing interest and attention that crypto has garnered in Washington D.C.

The US House of Representatives has passed another cryptocurrency-related bill in a standard vote. However, the legislation establishing a government task force aimed at preventing misuse of digital assets by nefarious actors is not expected to be enacted in its current form.

Rep. Zach Nunn (R-Iowa) proposed a bill related to cryptocurrencies, which had previously been approved by the House Financial Services Committee. However, even with bipartisan support for crypto-friendly legislation in the House, such as FIT21 Act, the Senate has yet to follow suit and show similar enthusiasm.

Last year, Nunn’s proposal, endorsed by all committee members, aimed to set up a short-term task force under the Treasury Department’s jurisdiction. This team was designed to investigate the role of digital assets in financing terrorism and money laundering and propose effective solutions. The task force would consist of experts from the industry, with representatives from “blockchain intelligence firms” being included.

During a speech in the House, Nunn emphasized that the proposed legislation was essential for bolstering American security, safeguarding our digital property, and fostering the development of future financial and internet technologies domestically.

Jaret Seiberg, a TD Cowen analyst, suggested this bill was primarily a political exercise.

Critics of cryptocurrencies view this as an opportunity to voice their calls for stricter measures against money laundering, the analyst remarked in a client note on Monday. On the other hand, supporters of cryptocurrencies see this as providing them with protection from accusations that their backing for digital assets contributes to money laundering and illicit activities.

The prominence of cryptocurrency in the 2024 presidential race is undeniable. However, it’s important to note that the chances of a unified regulatory approach from a divided Congress on this industry are quite slim. In light of this, crypto enthusiasts are closely monitoring several relevant provisions under consideration for the National Defense Authorization Act – an annual legislation defining our national defense priorities.

On Monday, the Digital Chamber penned a missive to Vice President Kamala Harris, who is increasingly being viewed as the frontrunner for the Democratic presidential nomination should President Joe Biden step down. In the correspondence, they urged Harris to advocate for progressive digital asset and blockchain technology policies. Specifically, they suggested amending the party’s platform to embrace cryptocurrencies and selecting a vice president with a strong background in this field and a history of promoting tech-friendly initiatives.

As an industry analyst, I’ve noticed that several key players in this sector have recently expressed their support for a more cryptocurrency-friendly stance from the potential Democratic leader. Their letters share similar sentiments.