Crypto security experts warn of risks in pending market structure bill

Global civil society organization Transparency International ￰0￱ urged lawmakers to reexamine some parts of the crypto market structure ￰1￱ bill is currently awaiting approval from Capitol ￰2￱ organization expressed its concerns about the legislation in a letter to ￰3￱ Majority Leader John Thune and Senator Charles ￰4￱ International’s concerns are on the Digital Asset Market Clarity Act (CLARITY Act) and the Responsible Financial Innovation Act (RFIA). Transparency International sees risks posed by the RFIA bill The letter highlights the risks posed by the bills, with support from the Free Russia Foundation, Financial Accountability and Corporate Transparency Coalition, and Nate Sibley, the director of the Hudson Institute’s Kleptocracy ￰5￱ parties want Congress to ensure that digital asset legislation includes measures to protect against money laundering and sanctions evasion, among other illicit ￰6￱ organization argued that virtual assets are becoming the new tools for laundering the proceeds of corruption, including bribery and ￰7￱ letter cited the example of Tareck El Aissami, a Venezuelan official accused of embezzling state funds into digital assets and laundering them through ￰8￱ exchanges.

“These blind spots in our crypto laws would give drug cartels, fentanyl traffickers, and corrupt regimes like Iran, North Korea, and Russia exactly what they need to anonymously move dirty money and fund their crimes.” -Scott Greytak, Deputy Executive Director of Transparency International ￰9￱ organization’s recommendations come in the wake of the recent market structure framework provided by Senate ￰10￱ market structure framework highlights the need for stricter regulatory measures for ￰11￱ senators previously explained that the risks stemming from the high volatility of most digital assets pose a financial crisis under the ￰12￱ newly appointed executive director of the President’s Council of Advisors on Digital Assets, Patrick Witt, also called for Congress earlier this month to move quickly on cryptocurrency market structure ￰13￱ said at an industry event in Washington, ￰14￱ September 12 that getting the legislation over the finish line is a top ￰15￱ ￰16￱ also argued that a loophole in the RFIA could allow decentralized crypto platforms to avoid policies designed to prevent money laundering and terrorist ￰17￱ International said in the letter that the ￰18￱ Department should have the power to implement AML measures on DeFi platforms to prevent illicit ￰19￱ letter also advocates for measures to eliminate certain loopholes for crypto ￰20￱ asset mixers, like Tornado Cash, have previously been tied to criminal ￰21￱ authors argued that the RFIA would allow companies to avoid accountability by claiming they don’t operate in the ￰22￱ also maintained that any final legislation must ensure that crypto platforms serving ￰23￱ must comply with ￰24￱ and AML/CFT ￰25￱ Act limits stablecoin issuers from offering yield The authors also acknowledged the importance of creating a level playing field for stablecoin ￰26￱ stated that all stablecoin issuers must implement reasonable ecosystem-wide ￰27￱ to them, the initiative could help ensure protections for investors while assuring they do not engage in illicit financial ￰28￱ GENIUS Act became law in July and stipulates that no stablecoin issuer can offer any yield or interest on ￰29￱ Democrats also suggested a prohibition on interest or yield paid either directly or via affiliates by stablecoin ￰30￱ stablecoin legislation prohibits issuers from offering yields directly or through affiliates, but does not block exchanges from doing ￰31￱ advocated for the term through affiliates to be included in the stablecoin legislation, and even after it was signed into law, they haven’t stopped calling for the ￰32￱ Bank Policy Institute wrote in August that lawmakers should use the market structure bill to close the loophole created by the GENIUS ￰33￱ crypto industry sees the stablecoin bill as fair legislation that permits exchanges and affiliates to pay interest to ￰34￱ lobbying groups responded to the Bank Policy Institute’s statement, arguing that only banks having such allowances gives them an advantage and limits consumer ￰35￱ seen where it ￰36￱ in Cryptopolitan Research and reach crypto’s sharpest investors and builders.