On July 27, the US Senate approved the 2024 National Defense Authorization Act (NDAA) worth $886 billion. The bill contains a provision that targets cryptocurrency mixers, anonymity-enhancing coins, and institutions involved in cryptocurrency transactions. NDAA is a significant law that authorizes the Department of Defense's federal funding allocation. The cryptocurrency-related amendment was introduced by a group of senators, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall.
The amendment aims to establish guidelines to prevent incidents similar to the FTX hack from occurring in the cryptocurrency industry. It builds upon previous acts like the Digital Assets Anti-Money Laundering Act and the Responsible Financial Innovation Act introduced in 202 2. The proposed amendments will require The development of vetting standards for cryptocurrencies to assess risk and ensure compliance with relevant sanctions and anti-money laundering laws.
Furthermore, the amendment calls for the US Treasury Department to conduct a study on tackling anonymous cryptocurrency transactions. This includes scrutinizing the use of cryptocurrency mixers like Tornado Cash, which allows users to keep their transactions private. The Treasury Department had already imposed sanctions on Tornado Cash in 2022, prohibiting residents from using the mixer due to its potential misuse by malicious actors for money laundering purposes. The aim is to enhance regulatory measures and prevent cryptocurrency-related criminal activities.
The NDAA also features another amendment that mandates US companies to disclose their investments in China. Senator Bob Casey emphasized that this notification is necessary for the government to monitor the transfer of critical technology to adversaries and better understand the involvement of US fir ms in China's market.
