II 

118TH CONGRESS 

1ST SESSION S. 2669 

To require the Financial Crimes Enforcement Network to issue guidance 

on digital assets, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2023 

Ms. WARREN (for herself, Mr. MARSHALL, Mr. MANCHIN, and Mr. GRAHAM) 

introduced the following bill; which was read twice and referred to the 

Committee on Banking, Housing, and Urban Affairs 

A BILL 

To require the Financial Crimes Enforcement Network to 

issue guidance on digital assets, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Digital Asset Anti5 Money Laundering Act of 2023’’. 

6 SEC. 2. DEFINITIONS. 

7 (1) ANONYMITY ENHANCED

8 CRYPTOCURRENCY.—The term ‘‘anonymity enhanced 

9 cryptocurrency’’ means a digital asset containing 

10 any feature that— 


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1 (A) prevents tracing through distributed 

2 ledgers; or 

3 (B) conceals or obfuscates the origin, des4 tination, and counterparties of digital asset 

5 transactions. 

6 (2) DIGITAL ASSETS.—The term ‘‘digital asset’’ 

7 means an asset that is issued or transferred using 

8 a cryptographically secured distributed ledger, 

9 blockchain technology, or any other similar tech10 nology. 

11 (3) DIGITAL ASSETS KIOSK.—The term ‘‘digital 

12 assets kiosk’’ means a digital assets automated teller 

13 machine that facilitates the buying, selling, and ex14 change of digital assets. 

15 (4) DIGITAL ASSETS MIXER.—The term ‘‘digital 

16 assets mixer’’ means a website, software, or other 

17 service with features that conceal or obfuscate the 

18 origin, destination, or counterparties of digital asset 

19 transactions. 

20 (5) FINANCIAL INSTITUTION.—The term ‘‘fi21 nancial institution’’ has the meaning given the term 

22 in section 5312(a) of title 31, United States Code. 

23 (6) MONEY SERVICES BUSINESS.—The term 

24 ‘‘money services business’’ has the meaning given 


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1 the term in section 1010.100 of title 31, Code of 

2 Federal Regulations. 

3 (7) UNHOSTED WALLET.—The term ‘‘unhosted 

4 wallet’’ means software or hardware that facilitates 

5 the storage of public and private keys used to 

6 digitally sign and securely transact digital assets, 

7 such that the stored value is the property of the wal8 let owner and the wallet owner has total independent 

9 control over the value. 

10 (8) VALIDATOR.—The term ‘‘validator’’ means 

11 a person or entity that— 

12 (A) processes and validates, approves, or 

13 verifies transactions, or produces blocks of dig14 ital asset transactions to be recorded on a cryp15 tographically secured distributed ledger or any 

16 similar technology, as specified by the Secretary 

17 of the Treasury; and 

18 (B) may perform other such services that 

19 may secure a digital assets kiosk network. 

20 SEC. 3. DIGITAL ASSET REQUIREMENTS. 

21 (a) DIGITAL ASSETS PARTICIPANTS DESIGNATION.— 

22 (1) DEFINITION OF FINANCIAL INSTITUTION.— 

23 (A) IN GENERAL.—Section 5312(a)(2) of 

24 title 31, United States Code, as amended by 

25 section 6110(a)(1) of the Anti-Money LaunVerDate Sep 11 2014 05:04 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2669.IS S2669

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1 dering Act of 2020 (division F of Public Law 

2 116–283), is amended— 

3 (i) in subparagraph (Z), by striking 

4 ‘‘or’’ at the end; 

5 (ii) by redesignating subparagraph 

6 (AA) as subparagraph (BB); and 

7 (iii) by inserting after subparagraph 

8 (Z) the following: 

9 ‘‘(AA) Unhosted wallet providers, digital 

10 asset miners, validators, or other nodes that 

11 may act to validate or secure third-party trans12 actions, independent network participants (in13 cluding maximal extractable value searchers), 

14 miner extractable value searchers, other 

15 validators or network participants with control 

16 over network protocols, or any other person fa17 cilitating or providing services related to the ex18 change, sale, custody, or lending of digital as19 sets that the Secretary shall prescribe by regu20 lation.’’. 

21 (B) EFFECTIVE DATE.—The amendments 

22 made by subparagraph (A) shall take effect on 

23 the day after the effective date of the final rules 

24 issued by the Secretary of the Treasury pursu25 ant to section 6110(b) of the Anti-Money LaunVerDate Sep 11 2014 05:04 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2669.IS S2669

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1 dering Act of 2020 (division F of Public Law 

2 116–283). 

3 (2) REGULATIONS.— 

4 (A) IN GENERAL.—Not later than 180 

5 days after the date of enactment of this Act, 

6 the Secretary of the Treasury, through the Di7 rector of the Financial Crimes Enforcement 

8 Network, shall promulgate regulations imposing 

9 requirements under subchapter II of chapter 53 

10 of title 31, United States Code, on financial in11 stitutions described in subparagraph (AA) of 

12 section 5312(a)(2) of title 31, United States 

13 Code, as added by paragraph (1)(A) of this 

14 subsection. 

15 (B) EXEMPTION.—The Secretary of the 

16 Treasury, through the Director of the Financial 

17 Crimes Enforcement Network, should consider 

18 for exemption from the regulations issued under 

19 subparagraph (A) assets— 

20 (i) issued or transferred using a cryp21 tographically secured distributed ledger, 

22 blockchain technology, or any other similar 

23 technology used solely for internal business 

24 applications; 


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1 (ii) not offered for sale, traded, or 

2 otherwise converted to fiat currency or an3 other digital asset; or 

4 (iii) otherwise deemed to pose little il5 licit finance risk. 

6 (C) PERIODIC REVIEWS.—The Secretary of 

7 the Treasury, through the Director of the Fi8 nancial Crimes Enforcement Network, shall 

9 periodic reviews of the classifications under 

10 paragraph (2). 

11 (b) REGISTRATION RULES.—The Financial Crimes 

12 Enforcement Network has the authority to subject the en13 tities described in subsection (a) to the registration rules 

14 under section 5330 of title 31, United States Code, and 

15 the foreign registration rules under section 

16 1022.380(a)(2) of title 31, Code of Federal Regulations. 

17 (c) IMPLEMENTATION OF PROPOSED RULE.—Not 

18 later than 1 year after the date of enactment of this Act, 

19 the Financial Crimes Enforcement Network shall finalize 

20 the proposed virtual currency rule (85 Fed. Reg. 83840; 

21 relating to requirements for certain transactions involving 

22 convertible virtual currency or digital assets). 

23 (d) REPORTING REQUIREMENTS.—Not later than 18 

24 months after the date of enactment of this Act, the Finan25 cial Crimes Enforcement Network shall promulgate reguVerDate Sep 11 2014 05:04 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2669.IS S2669

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1 lations that require United States persons with greater 

2 than $10,000 in digital assets in 1 or more accounts out3 side of the United States to file a report described in sec4 tion 1010.350 of title 31, Code of Federal Regulations, 

5 using the form described in that section, in accordance 

6 with section 5314 of title 31, United States Code. 

7 (e) TREASURY REGULATIONS.—Not later than 18 

8 months after the date of enactment of this Act, the Sec9 retary of the Treasury shall promulgate regulations that 

10 require financial institutions to establish controls to miti11 gate illicit finance risks associated with— 

12 (1) handling, using, or transacting business 

13 with digital asset mixers, anonymity enhanced 

14 cryptocurrency, and other anonymity-enhancing 

15 technologies, as specified by the Secretary; and 

16 (2) handling, using, or transacting business 

17 with digital assets that have been anonymized by the 

18 technologies described in paragraph (1). 

19 SEC. 4. EXAMINATION AND REVIEW PROCESS. 

20 (a) TREASURY.—Not later than 2 years after the 

21 date of enactment of this Act, the Secretary of the Treas22 ury, in consultation with the Conference of State Bank 

23 Supervisors, shall establish a risk-focused examination and 

24 review process for digital assets participants designated as 


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1 financial institutions and money services businesses to as2 sess— 

3 (1) the adequacy of antimoney-laundering and 

4 countering-the-financing-of-terrorism programs and 

5 reporting obligations under subsections (g) and (h) 

6 of section 5318 of title 31, United States Code; and 

7 (2) compliance with antimoney laundering and 

8 countering-the-financing-of-terrorism requirements 

9 under subchapter II of chapter 53 of title 31, United 

10 States Code. 

11 (b) SEC.—Not later than 2 years after the date of 

12 enactment of this Act, the Securities and Exchange Com13 mission, in consultation with the Secretary of the Treas14 ury, shall establish a dedicated risk-focused examination 

15 and review process for entities regulated by the Commis16 sion to assess— 

17 (1) the adequacy of antimoney laundering and 

18 countering-the-financing-of-terrorism programs and 

19 reporting obligations under subsections (g) and (h) 

20 of section 5318 of title 31, United States Code; and 

21 (2) compliance with antimoney laundering and 

22 countering-the-financing-of-terrorism requirements 

23 under subchapter II of chapter 53 of title 31, United 

24 States Code. 


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1 (c) CFTC.—Not later than 2 years after the date of 

2 enactment of this Act, the Commodity Futures Trading 

3 Commission, in consultation with the Secretary of the 

4 Treasury, shall establish a dedicated risk-focused exam5 ination and review process for entities regulated by the 

6 Commission to assess— 

7 (1) the adequacy of antimoney laundering and 

8 countering-the-financing-of-terrorism programs and 

9 reporting obligations under subsections (g) and (h) 

10 of section 5318 of title 31, United States Code; and 

11 (2) compliance with antimoney laundering and 

12 countering-the-financing-of-terrorism requirements 

13 under subchapter II of chapter 53 of title 31, United 

14 States Code. 

15 SEC. 5. DIGITAL ASSETS KIOSKS. 

16 (a) IN GENERAL.—Not later than 18 months after 

17 the date of enactment of this Act, the Financial Crimes 

18 Enforcement Network shall require digital asset kiosks 

19 owners and administrators to submit and update the phys20 ical addresses of the kiosks owned or operated by the 

21 owner or administrator every 90 days, as applicable. 

22 (b) RULEMAKING.—Not later than 18 months after 

23 the date of enactment of this Act, the Financial Crimes 

24 Enforcement Network shall promulgate regulations re25 quiring digital asset kiosk owners and administrators to— 


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1 (1) verify the identity of each customer using a 

2 valid form of government-issued identification or 

3 other documentary method, as determined by the 

4 Secretary of the Treasury; and 

5 (2) collect the name and physical address of 

6 each counterparty to the transaction. 

7 (c) REPORTS.— 

8 (1) FINCEN.—Not later than 180 days after 

9 the date of enactment of this Act, the Financial 

10 Crimes Enforcement Network shall issue a report on 

11 digital assets kiosk networks operating as money 

12 services businesses that have not registered with the 

13 Financial Crimes Enforcement Network in violation 

14 of section 1022.380 of title 31, Code of Federal 

15 Regulations, that includes— 

16 (A) estimates of the number and locations 

17 of suspected unlicensed operators, as applicable; 

18 and 

19 (B) an assessment of any additional re20 sources the Financial Crimes Enforcement Net21 work determines to be necessary to investigate 

22 the unlicensed digital asset kiosk networks. 

23 (2) DEA.—Not later than 1 year after the date 

24 of enactment of this Act, the Drug Enforcement Ad25 ministration shall, in consultation with other agenVerDate Sep 11 2014 05:04 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2669.IS S2669

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1 cies as appropriate, issue a report identifying rec2 ommendations to reduce drug trafficking and money 

3 laundering associated with digital assets kiosks. 

4 SEC. 6. AUTHORIZATION OF APPROPRIATIONS. 

5 There are authorized to be appropriated to the Sec6 retary of the Treasury such sums as are necessary to carry 

7 out this Act. 

Æ 


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