The US government is preparing to bring radical anti-money laundering practices from the Patriot Act to the crypto sector, in a movement that could reform the limits of privacy, compliance and innovation. According to the report by the Rage, the Treasury Ministerial Section of the USA Patriot Act tries to be described-described as one of the most far-reaching financial surveillance instruments for cryptocurrency activities such as mixers, Defi protocols and certain portfolio services.
In the center of the initiative is the Financial Crimes Enforcement Network (FINCEN), which draws up a rule that would formally crypto mixtures classify as a ‘primary money laundering program’. Such an indication would give the American treasury the authority to effectively reduce these services from the American financial system by prohibiting banks, exchanges and payment processors to handle them.
US revives war against crypto -privacy
Anger report Note that this new rule is expected to mirror and expand it to the “Mixer Rule” of 2022 that ran Fincen after sanctioning Tornado -Contant money, but with many broader implications. In practice, section 311 powers state that Treasury is not only on the black list of specific entities on the black list, but also to prohibit full categories of transactions as a high risk. As the report states: “Fincen’s proposal would extend the extraordinary powers of the Patriot Act to digital assets, the placement of mixers, defi protocols and even portfolio providers square in the government’s transverse reasons.”
Francis Pouliot, the founder and CEO of Bull Bitcoin, said via X: “American bureaucrats attack Bitcoin users privacy. […] The Orwellian scenario may not be completely over, but it is a signal: if we leave them, they will determine that any use of Bitcoin is ‘suspected’ in addition to traced custewitage port feuds.
The legislators are also in line with the push of the treasury. A group in the house has re -introduced the ‘special measures to combat Geld Waswet’, a bill that is designed to codify treasuries use of section 311 in the context of cryptocurrencies. By placing the statutory weight behind this approach, the congress could considerably expand the latitude of the executive to act against privacy-oriented crypto tools without the legislation approval for the legislation.
The implications extend beyond mixers. Observers warn that if Treasury claims that certain smart contracts or decentralized protocols facilitate illegal financing, these platforms can be designated on the basis of Article 311. This would force us to block intermedeats with them, which effectively settles from the regulated economy.
A policy expert in the report warned: “This is not only about Tornado -Contant money. As soon as these powers have been formally expanded, any Defi protocol that Treasury is placed on the list as a management of money. That changes the risk alculus for the entire sector.”
The response of the industry is expected to be fierce. Crypto proponents claim that the random use of section 311 would trample the correct process and innovation by treating Open-Source Code as a criminal infrastructure. Groups of civil freedoms have already disputed the earlier actions of the treasury against mixers, warning that general prohibitions recognize the constitutional rights of developers and users. Switches and preservators can receive an increased regulatory risk and costs if they adapt to an extensive perimeter of the surveillances.
The move comes when the US intensify its focus on financial flows related to sanctioned entities, cyber criminals and foreign opponents. Treasury has repeatedly cited the use of crypto mixtures by North Korean hacking groups, Russian DarkNet markets and ransomware operators. Officials claim that law enforcement without new powers will have difficulty in preventing digital assets from undermining the integrity of the global financial system.
Whether the proposed rule survives legal and political challenges remains uncertain. The Tornado -Contant Sanctions are still the subject of continuous lawsuits, and expanding the Patriot Act measures to the decentralized ecosystem is expected to cause fresh constitutional battles. Nevertheless, the process is clear: Washington indicates that the era of light supervision of crypto-privacy aids ends.
As the report concludes: “The Patriot Act has long been the nuclear option of the government in financial supervision. By aiming it in the direction of Crypto, the treasury makes it clear that no corner of the digital assets industry is out of its reach.”
At the time of the press, the total crypto market hairstyle was $ 3.95 trillion.
Featured image made with dall.e, graph of tradingview.com
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