On May 25th 2017 Senator Chuck Grassley
a Republican from Indiana introduced S.1241 The Combating Money Laundering, Terrorist Financing, And Counterfeiting Act of 2017.
The bill amends the definition of “financial institution” to include digital currencies and digital exchanges.
The current definition includes banks, trust companies, credit unions and currenxy exchanges. If passed S.1241 would alter the definition to unclude “an issuer, redeemer, or cashier of prepaid access devices, digital currenxt, or any digital exchanger or tumbler of digital currency.”
On November 28, 2017, the US Senate, Judiciary Committee held a hearing regarding bill.
Ranking Judiciary Committee member Diane Feinstein i her opening remarks said, “The bill criminalizes intentionally concealing ownership or control of a bank account.”
In other related news Whitehouse spokeswoman Sarah Huckabee Sanders admitted last week that the Trump Administration is “monitoring” cryptocurrencies, and that Homeland Security head Tom Bossert had brought up bitcoin at a meeting with Trump earlier that week.
William Dudley, president of the Federal Reserve Bank of New York, discussed the prospect of a Fed-issued cryptocurrency. “It’s really very premature to be talking about the Federal Reserve offering digital currencies, but it is something we are thinking about,” he said during a talk at Rutgers University
S.1241 seeks to erode one of the main utilities of cryptocurrency, privacy. With crypto exchanges being forced to collect “know your customer” data, the feds can easily identify and tax or punish cryptocurrency holders. Penalties written into the bill include up to 10 years in prison and/or a one million dollar fine plus asset forfeiture.
It is clear the federal government wants total transparency when it comes to the financial assets of Americans.
Will these revelations cause a chilling effect scaring Americans away from cryptocurrency or will more Americans recognize the threat of government overreach and resist by putting more of their financial assets into cryptocurrencies like Bitcoin? Only time will tell.