A new bipartisan bill, named the Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act, has been introduced into the US Senate in an effort to tighten Know Your Customer and Anti-Money Laundering (KYC/AML) regulations onto decentralized finance (DeFi) operations. According to the news release by Senator Jack Reed, the bill, yet unpublished, suggested a promise of an active oversight into the crypto arena, putting more control on financial organizations, including DeFi operators, centralized crypto trading platforms and even casinos and pawn shops.
Simultaneously, the bill is trailed by skepticism from the crypto-community, with some terming it as a “nonstarter” and an “existential threat to DeFi.” As per the draft bill as read on GitHub, there is a requirement that any project controller or, as a fall-back, anyone who invests more than $25 million, should bear responsibility for the usage of the DeFi service by sanctioned individuals. This control responsibility is perceived as a deterrent to passive investors, who, despite their deep pockets, may not necessarily possess control over the project.
The CANSEE Act plans to extend the United States Treasury Department’s AML capabilities beyond the traditional financial structures. This is in acknowledgment of advancing technologies like cryptocurrencies that have unveiled new financial transaction approaches, some of which may be used for illicit financial activities.
Moreover, Crypto kiosk (ATM) operators will face new requirements aimed at curbing money laundering. The operators will need to verify both parties in a transaction, underlining the new hardline stance on digital identification in crypto transactions.
The bill is seen as a continuation of the most recent effort by US policymakers to assert control over burgeoning digital finance platforms. However, the bone of contention will definitely reside on the adoption of this bill. While regulation will add a layer of safety against fraudulent activities, it’s the iron-fisted approach that can potentially suppress innovation by imposing a stringent and inhibitive framework. As the crypto-tech landscape continues to evolve, legislative bodies, not just in the US, will have to find a balance between regulatory control and freedom of innovation. This calls for a cautious approach, where the need for security doesn’t drown out the need for technological advancement. So, will the bill be the harbinger of a safe yet progressive crypto environment, or will it turn out to be more of a hurdle to innovation? Only time will tell.
Source: Cointelegraph
