Digital Asset Anti-Money Laundering Act: A Threat to Privacy and Innovation

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• The Digital Asset Anti-Money Laundering Act Of 2022, proposed by Senator Elizabeth Warren, proposes regulations that classify custodial wallets and “unhosted wallet providers” as money service businesses.
• It also prohibits financial institutions from handling, using or transacting with digital asset mixers, privacy coins and other anonymity-enhancing technologies.
• This bill is deeply concerning to international human rights, unconstitutional and in direct opposition to current U.S. consumer privacy regulations.

Yesterday, the U.S. Senate proposed a bill that is deeply concerning to international human rights, unconstitutional, and in direct opposition to current U.S. consumer privacy regulations: The Digital Asset Anti-Money Laundering Act Of 2022. Proposed by Senator Elizabeth Warren, this bill has the potential to drastically alter the landscape of digital asset providers and users.

The bill proposes the classification of custodial wallets and “unhosted wallet providers” as money service businesses. This would require anyone developing non-custodial wallets to obtain a money transmitter license. This is problematic, as “unhosted wallets,” or non-custodial wallets, are simply software. It would be akin to requiring all developers of email applications to obtain a license. This requirement would infringe upon the first amendment rights of developers.

The bill also proposes the promulgation of a rule that prohibits financial institutions from handling, using, or transacting with digital asset mixers, privacy coins and other anonymity-enhancing technologies, as specified by the secretary of the U.S. Treasury. The implications of these regulations are concerning, as they could lead to the criminalization of anyone using privacy coins, such as Monero, or any other form of digital asset mixer or anonymizing technology.

The Digital Asset Anti-Money Laundering Act Of 2022 has the potential to drastically limit the ability of citizens and businesses to use digital assets in a secure and private manner. It seeks to place greater control in the hands of the government, rather than giving citizens the right to privacy and the freedom to choose their own technologies for digital asset use. Furthermore, the bill is in direct opposition to current U.S. consumer privacy regulations, which seek to empower citizens and protect their data from government interference.

It is of utmost importance that citizens and businesses understand the implications of this bill, and take action to ensure that their data remains secure and private. This bill not only threatens the rights of citizens and businesses, but also has the potential to stifle innovation in the digital asset space. It is essential that we take a stand against this bill and make sure that our data remains secure and our privacy is respected.