Marshall, Gillibrand, Lummis, and Warren Announce Senate Passage of Amendment to NDAA To Prevent Use of Crypto Assets In Illicit Financial Transactions

Washington, D.C. – Roger Marshall (R-KS) U.S. Senators Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Elizabeth Warren (D-MA) announced Senate passage of their amendment to the FY24 NDAA that would help prevent the use of crypto assets in illicit financial transactions. The amendment requires regulators to set examination standards for financial institutions engaged in crypto asset activities and requires the Treasury Department to give recommendations to Congress regarding crypto asset mixers and anonymity-enhancing crypto assets. The amendment represents one of the most substantial congressional actions to date regarding crypto assets.  

The provisions of the amendment were taken from Senator Warren’s and Senator Marshall’s Digital Asset Anti-Money Laundering Act, introduced in 2022 and the 2023 Lummis-Gillibrand Responsible Financial Innovation Act.

“As we continue working to find the right regulatory framework for digital assets, the one thing that everyone can agree on is that this technology must not be a tool to circumvent law enforcement and empower criminals,” Senator Marshall said. “Our bipartisan amendment is a step forward in our fight to crack down on the illicit activities surrounding cryptocurrencies. I thank my colleagues for their efforts on this amendment and look forward to continue working with them on digital asset regulations in the future.”

“Prohibiting the use of cryptocurrencies for money laundering and illicit finance is critical to both our national security and economy,” said Senator Gillibrand. “This amendment requires federal regulators to enact strong examination standards that will help prevent the utilization of cryptocurrencies in illegal activities. This is an important step in appropriately regulating crypto assets and I’m grateful to Senators Lummis, Warren and Marshall for their hard work on this legislation.”

“Cracking down on illicit finance in the crypto asset industry is essential for weeding out bad actors and ensuring crypto assets are not used to evade sanctions and fund terrorism,” said Senator Lummis. “ I’m thrilled that our bipartisan amendment to combat illicit finance passed the Senate today, and I applaud Senators Gillibrand, Warren and Marshall for their work to ensure this amendment was included in the final version of the NDAA.”

“The most urgent problem in crypto today is its illicit use by rogue nations, ransomware gangs, drug traffickers, and cybercriminals,” said Senator Warren. “We need to make it more difficult for bad actors to exploit loopholes in the system and this amendment is a good first step to ensure that the crypto industry follows the same rules that everyone else follows.”

Specifically, the amendment: 

  1. Requires the Secretary of the Treasury to establish examination standards for crypto assets. These examination standards would give examiners more guidance in how to assess the real risks of crypto assets and helps ensure compliance with money laundering and sanctions laws and provides needed legal clarity to crypto exchanges about their regulatory expectations. 
  2. Requires the Treasury Department to conduct a study on combating anonymous crypto asset transactions like asset mixers and tumblers, including providing date of their use, level of their use, legislative and regulatory approaches employed by other jurisdictions, and recommendations for legislation or regulation related to these technologies.