Legislators in the United States have taken aim at digital “cryptocurrencies” like bitcoin and ethereum with new proposed legislation that would force people coming into America to report their cryptocurrency holdings. Those pushing this invasion of personal privacy say it’s necessary to facilitate a crackdown on money laundering operations that use cryptocurrencies as cover.
A new report by Silver Report Uncut warns that fresh language would be added to existing anti-money laundering laws that specifies prepaid access devices, digital wallets, and other digital currency exchangers as being subject to reporting requirements if they contain the cryptocurrency equivalent of $10,000 or higher.
Included in the proposed sweep are mobile phones, flash drives, and laptop computers that contain any digital records of cryptocurrency holdings. All such devices and the amounts they contain in excess of the threshold would have to be declared and reported upon entry into the U.S. Such a move would completely eliminate the anonymity factor that made cryptocurrencies so desirable in the first place.
The bill, entitled “Combating Money Laundering, Terrorist Financing and Counterfeiting Act,” was introduced by Senators Chuck Grassley of Iowa and Dianne Feinstein of California. If passed, the bill would move digital cryptocurrencies one step closer towards being defined as “monetary instruments,” which would make them more of a target for regulatory oversight.
“Among the changes, according to a draft text of the bill, are additions to definitions for ‘financial institutions,’ which, if the bill is passed, would include ‘any digital currency exchanger or tumbler,” writes Stan Higgins for CoinDesk.com. “Additionally, the bill clarifies that any ‘issuer, redeemer or cashier’ of a ‘digital currency’ is also covered.” (Related: To learn more about bitcoin, be sure to check out Bitcoin.Fetch.news.)
Bitcoin has long been branded by its opposition as a shelter for criminals to anonymously pay one another without being tracked. It’s a gross stereotype, of course, but one that’s had a pretty big impact in the way that legislators are going about trying to regulate it.
A summary of the bill has been posted at Sen. Grassley’s website detailing how the new law would affect travelers. It seems to directly coincide with recent efforts to prohibit the entry of certain individuals who try to enter U.S. carrying laptops on their person as opposed to storing them in checked luggage.
“Beyond the regulatory adjustment, the bill seeks information from the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) agency about its policies on digital currencies,” adds Higgins.
“Specifically, it calls for a report ‘detailing a strategy to detect prepaid access devices and digital currency at border crossings and ports of entry,’ This report – which would be due 18 months after the ostensible passage of the bill – is also required to include details about how such a strategy would be implemented.”
Some legislators are even trying to link cryptocurrencies to terrorism in an effort to taint the public’s view of them. Just prior to the introduction of this bill, Representative Kathleen Rice of New York introduced another similar one entitled, “Homeland Security Assessment of Terrorists [sic] Use of Virtual Currencies Act.”
If passed, the bill would require the Secretary of Homeland Security for Intelligence and Analysis to coordinate with other federal partners to develop and disseminate a threat assessment study on the potential use of cryptocurrencies by terrorists. The implication, of course, is that the government has to intervene and start tracking cryptocurrency use to prevent terrorist attacks.
A full copy of this bill can be viewed online.
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