Title: Digital Asset Anti-Money Laundering Act of 2022
Policy area: Finance and Financial Sector

Summary:
Digital Asset Anti-Money Laundering Act of 2022
This bill directs specified federal financial agencies to establish rules regarding digital assets. The Financial Crimes Enforcement Network (FinCEN) must establish a rule classifying digital asset wallet providers, cryptocurrency miners, validators, and others as money service businesses. In addition, FinCEN must require U.S. persons to report cryptocurrency transactions through foreign accounts of over $10,000. FinCEN must also require digital asset kiosk owners and administrators to submit and update every three months the physical addresses of the kiosks.
The Department of the Treasury must prohibit financial institutions from handling, using, or transacting business with (1) digital asset mixers, privacy coins, and other anonymity-enhancing technologies; and (2) digital assets that have been anonymized by these technologies.
Treasury, the Securities and Exchange Commission, and the Commodity Futures Trading Commission must establish risk examination and review processes for anti-money laundering requirements for their respective regulated entities.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5267 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 5267

 To require the Financial Crimes Enforcement Network to issue guidance 
               on digital assets, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 15, 2022

  Ms. Warren (for herself and Mr. Marshall) 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Digital Asset Anti-Money Laundering 
Act of 2022''.

SEC. 2. DEFINITIONS.

            (1) Digital assets.--The term ``digital asset'' means an 
        asset that is issued or transferred using distributed ledger, 
        blockchain technology, or similar technology, including but not 
        limited to virtual currencies, coins, and tokens.
            (2) Digital asset kiosk.--The term ``digital asset kiosk'' 
        means a stand-alone machine, commonly referred to as a digital 
        asset automated teller machine, that facilitates the buying, 
        selling, and exchange of virtual currencies.
            (3) Digital asset mixer.--The term ``digital asset mixer'' 
        means a website, software, or other service designed to conceal 
        or obfuscate the origin, destination, and counterparties of 
        digital asset transactions.
            (4) Financial institution.--The term ``financial 
        institution'' has the meaning given the term in section 5312(a) 
        of title 31, United States Code.
            (5) Privacy coin.--The term ``privacy coin'' means a 
        digital asset designed to--
                    (A) prevent tracing through distributed ledgers; or
                    (B) conceal or obfuscate the origin, destination, 
                and counterparties of digital asset transactions.

SEC. 3. DIGITAL ASSET RULEMAKINGS.

    (a) Money Service Business Designation.--The Financial Crimes 
Enforcement Network shall promulgate a rule classifying custodial and 
unhosted wallet providers, cryptocurrency miners, validators, or other 
nodes who may act to validate or secure third-party transactions, 
independent network participants, including MEV searchers, and other 
validators with control over network protocols as money service 
businesses.
    (b) Implementation of Proposed Rule.--Not later than 120 days after 
the date of enactment of this Act, the Financial Crimes Enforcement 
Network shall finalize the proposed virtual currency rule (85 Fed. Reg. 
83840; relating to requirements for certain transactions involving 
convertible virtual currency or digital assets).
    (c) Reporting Requirements.--Not later than 120 days after the date 
of enactment of this Act, the Financial Crimes Enforcement Network 
shall promulgate a rule that requires United States persons engaged in 
a transaction with a value greater than $10,000 in digital assets 
through 1 or more accounts outside of the United States to file a 
report described in section 1010.350 of title 31, Code of Federal 
Regulations, using the form described in that section, in accordance 
with section 5314 of title 31, United States Code.
    (d) Treasury Regulations.--Not later than 120 days after the date 
of enactment of this Act, the Secretary of the Treasury shall 
promulgate a rule that prohibits financial institutions from--
            (1) handling, using, or transacting business with digital 
        asset mixers, privacy coins, and other anonymity-enhancing 
        technologies, as specified by the Secretary; and
            (2) handling, using, or transacting business with digital 
        assets that have been anonymized by the technologies described 
        in paragraph (1).

SEC. 4. EXAMINATION AND REVIEW PROCESS.

    (a) Treasury.--Not later than 2 years after the date of enactment 
of this Act, the Secretary of the Treasury, in consultation with the 
Conference of State Bank Supervisors and Federal Financial Institutions 
Examination Council, shall establish a risk-focused examination and 
review process for money service businesses to assess--
            (1) the adequacy of antimoney laundering programs and 
        reporting obligations under subsections (g) and (h) of section 
        5318 of title 31, United States Code; and
            (2) compliance with antimoney laundering and countering the 
        financing of terrorism requirements under subchapter II of 
        chapter 53 of title 31, United States Code.
    (b) SEC.--Not later than 2 years after the date of enactment of 
this Act, the Securities and Exchange Commission shall establish a 
dedicated risk-focused examination and review process for entities 
regulated by the Commission to assess--
            (1) the adequacy of antimoney laundering programs and 
        reporting obligations under subsections (g) and (h) of section 
        5318 of title 31, United States Code; and
            (2) compliance with antimoney laundering and countering the 
        financing of terrorism requirements under subchapter II of 
        chapter 53 of title 31, United States Code.
    (c) CFTC.--Not later than 2 years after the date of enactment of 
this Act, the Commodity Futures Trading Commission shall establish a 
dedicated risk-focused examination and review process for entities 
regulated by the Commission to assess--
            (1) the adequacy of antimoney laundering programs and 
        reporting obligations under subsections (g) and (h) of section 
        5318 of title 31, United States Code; and
            (2) compliance with antimoney laundering and countering the 
        financing of terrorism requirements under subchapter II of 
        chapter 53 of title 31, United States Code.

SEC. 5. DIGITAL ASSET KIOSKS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Financial Crimes Enforcement Network shall require 
digital asset kiosk owners and administrators to submit and update the 
physical addresses of the kiosks owned or operated by the owner or 
administrator every 3 months, as applicable.
    (b) Guidance.--Not later than 1 year after the date of enactment of 
this Act, the Financial Crimes Enforcement Network shall issue guidance 
requiring digital asset kiosk owners and administrators to--
            (1) verify the identity of each customer using a valid form 
        of government-issued identification or other documentary 
        method, as determined by the Secretary of the Treasury; and
            (2) collect the name, date of birth, physical address, and 
        phone number of each counterparty to the transaction.
    (c) Reports.--
            (1) FinCEN.--Not later than 120 days after the date of 
        enactment of this Act, the Financial Crimes Enforcement Network 
        shall issue a report identifying unlicensed kiosk operators and 
        administrators, including identification of known unlicensed 
        operators and estimates of the number and locations of 
        suspected unlicensed operators, as applicable.
            (2) DEA.--Not later than 1 year after the date of enactment 
        of this Act, the Drug Enforcement Administration shall issue a 
        report identifying recommendations to reduce drug trafficking 
        with digital asset kiosks.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of the 
Treasury such sums as are necessary to carry out this Act.
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