US Senate passes the NDAA
The Senate of the United States of America USA has passed a landmark bill the NDAA or the National Defence Authorisation Act. This bill mainly addresses USA’s defense department and aims to help it by authorizing funds for it.
the bill allocated 886 billion dollars to the department on 27th July 2023.
This bill is a landmark in its own right as it mentions and targets a number of crypto related services and entities namely
- Crypto mixers
- Anonymity centric coins and
- The institutions that deal with crypto trading
With this bill an attempt is being made to draw the attention of the lawmakers toward crypto and put the spotlight on the crypto industry in general
Why this bill matters to crypto?
This bill sees a crypto related amendment that has been put forward by the following senators like Cynthia Lummis, Kirsten Gillibrand, Roger Miller, and Elizabeth Warren.
Role of NDAA for the Defense dept
Though this bill mainly aims in Authorising USA's defence department spending of federal money, however, it mentions key points related to crypto.
As it draws focus on anonymity and institutional crypto trading.
Mentioning crypto in such a light does not do justice to the merits of this asset class.
Amendment to Digital Asset anti money laundering act
The bill has its roots in the digital asset anti money laundering act that dates back to 2022 and the responsible financial innovation act.
It may Be aimed toward preventing another FTX style event from happening.
These inclusions are aimed at creating guidelines to monitor crypto transactions in an attempt to curb any sinister funding activity.
The inclusion of crypto may aim that all crypto related businesses comply with the Money laundry laws and they do not flout the sanctions which may be imposed on trade and financial transactions.
It also imposes its powers to make the Department of US Treasury work towards monitoring and restricting anonymous crypto transactions and related activities.
Back in the year 2022 sanctions had already been put against Tornado Cash a popular crypto mixer of the time.
What are crypto mixers?
Crypto mixers like Tornado Cash provide the facility to anonymize crypto transactions.
In a typical open blockchain transaction when a user sends funds from his wallet to another wallet the transaction and wallet addresses can be tracked on the blockchain explorer.
However, in a typical crypto mixer operation a user does not send the funds directly to the recipient's wallet.
Instead, he sends the funds to an address provided by the mixing service. The mixer then sends out the predetermined amount of funds to the destination wallet in such a way that the funds are sent and routed through a number of unrelated wallets.
This way it becomes practically impossible to track the transaction to the sender's wallet.
The mixing service takes a fee for performing such transactions.
Authorities suspect and fear that such services may be utilized by malicious actors for money laundering.
NDAA amendment to disclose investments
An amendment in the NDAA requires companies in USA to disclose their investments in China
Why crypto for the greater good is not being mentioned?
When agencies and people in power put restrictions on crypto or put it to greater scrutiny they are presenting only a small part of the big picture.
Often highlighting the negatives get the spotlight and the greater good that crypto and blockchain technology are doing gets missed.
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