In May, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a stark alert: Iran was using digital currencies to evade sanctions and support terrorist groups. Iran attempted to coerce ships trying to exit the Strait of Hormuz into paying tolls in cryptocurrency — something the U.S. Treasury Department has explicitly sought to sanction over the last three months. What if Congress passed legislation to help facilitate these types of corrupt payments?
This is a key question the Senate should ask itself while considering the CLARITY Act – a piece of legislation that, as drafted, would solidify glaring, dangerous and shocking loopholes for the crypto industry. This bill would omit many of the standard responsibilities for financial institutions that were put in place to protect national security after the horrific attacks of 9/11. If enacted, it would limit the types of crypto-related firms that have to abide by anti-money laundering (AML) and counter-terrorism financing rules.
