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Senate Bill Threatens Bitcoin with U.S. Sanctions

Senate Bill Threatens Bitcoin with U.S. Sanctions

Jun 10, 2024

Senate Bill Threatens Bitcoin with U.S. Sanctions

A provision targeting Bitcoin's "ties to terrorism" was included in a Senate spending package. This legislation, part of the Senate Select Committee on Intelligence's funding bill, passed unanimously with a 17-0 vote. However, the Bitcoin-related section was not publicly mentioned nor highlighted as a major provision by Sen. Mark Warner (D-Va.), the committee's chairman, in his press release.

The provision in question could significantly impact the Bitcoin industry by mandating stricter user identity verification to avert sanctions that could harm Bitcoin businesses. The aim is to accelerate and automate the sanctioning of "foreign digital asset transaction facilitators" linked to terrorist groups. Such facilitators include cryptocurrency exchanges, and the legislation, if enacted, would be a major policy shift for the U.S. Bitcoin industry.

Despite the surprise inclusion in the bill, Sen. Warner's staff is now engaging with digital asset industry representatives to discuss the provision, indicating the issue is still open for dialogue as the spending package moves forward, possibly within the National Defense Authorization Act (NDAA).

Cody Carbone, the chief police officer for the Digital Chamber, an industry lobbying group, expressed that Warner's staff is receptive to broader industry engagement. He predicts that the provision is likely to be removed during the NDAA process due to immediate pushback.

This legislative move comes on the heels of the House of Representatives' approval of the Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to regulate the industry without stifling innovation.

At present, the offices of Sen. Mark Warner and Sen. Marco Rubio (R-Fla.), vice-chairman of the intelligence committee, have not commented on the provision. Industry lobbying groups continue to express their willingness to work with policymakers on legislation that addresses the "illicit use of cryptocurrency."

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