"Blockchain Integrity Act" - 118TH US CONGRESS - 2D SESSION

[jafo]

Wow! Just wow!

"Blockchain Integrity Act" tl;dr:

• Bans mixers (defined as a "service designed to conceal counterparties of digital asset transactions")
• The fine for interacting with mixed coins is $100k
• Privacy coins (defined the same as mixers!) will be examined separately

Link 👇 pic.twitter.com/RHxHCKUQ9b

— Nikita Zhavoronkov (@nikzh) May 8, 2024

The actual bill: https://casten.house.gov/imo/media/doc/blockchain_integrity_act.pdf

@wellington , any thoughts on this?

 

[mraleph]

Holy whatever

https://www.cato.org/blog/latest-at...rt, the Blockchain Integrity,D‑MA) playbook).
"In short, the Blockchain Integrity Act would first establish a two‐year moratorium that prohibits financial institutions from going anywhere near cryptocurrency that has been routed through a mixer (a page out of Senator Elizabeth Warren’s (D‑MA) playbook)."

They are using WARP drive.

 

[khinkali]

two‐year moratorium that prohibits financial institutions from going anywhere near cryptocurrency that has been routed through a mixer

This could get messy for financial institutions to implement as wallets receive from multiple sources that receive from multiple sources, etc.

What % of transactions from mixers would pass the threshold? Or what % of value? How many transaction to look back? This is typical of US lawmaking, make the rule vague so that businesses are over-cautious to avoid penalties, ending in a result that would not have passed scrutiny.

From the bill:

it shall be unlawful for a financial institution to handle, use, or transact with—
(A) any incoming funds that have been routed through a digital asset mixer operating on a cryptographically secured distributed ledger; and
(B) any outgoing funds routed directly to a digital asset mixer operating on a cryptographically secured distributed ledger.

OK so "outgoing funds routed directly to" vs "incoming funds that have been routed through" a mixer. The wording suggests that they understand the issue, but fail to deal with it. Mr Casten uses the word "integrity" to name the bill, but shows little integrity in drafting it.

 

[Martin Everson]

Seems too burdensome that most FI's will simply not deal with crypto. Only crypto ETF's and other captive crypto trading systems will benefit from this type of action.

 

[khinkali]

Seems too burdensome that most FI's will simply not deal with crypto. Only crypto ETF's and other captive crypto trading systems will benefit from this type of action.

That's what they want. "Unhosted" wallets are "bad".

But it varies by blockchain. You can send BTC from your wallet to another party avoiding the tainted part (like sending some diamonds from a mixed bag). But with ETH that is much harder as the balance is mixed (like part of the oil in a tanker that was filled from different places).

The Anti Crypto Army will want to make things difficult for VASPs (the captive crypto trading systems) to interact with regular people, just as in some places they make it hard to interface cash with banking.

 

[jafo]

The wording suggests that they understand the issue, but fail to deal with it. Mr Casten uses the word "integrity" to name the bill, but shows little integrity in drafting it.

Exactly! It's all about giving their criminal friends on Wall Street more power and monopoly through law!

 

[wellington]

Wow! Just wow!

"Blockchain Integrity Act" tl;dr:

• Bans mixers (defined as a "service designed to conceal counterparties of digital asset transactions")
• The fine for interacting with mixed coins is $100k
• Privacy coins (defined the same as mixers!) will be examined separately

Link 👇 pic.twitter.com/RHxHCKUQ9b

— Nikita Zhavoronkov (@nikzh) May 8, 2024

The actual bill: https://casten.house.gov/imo/media/doc/blockchain_integrity_act.pdf

@wellington , any thoughts on this?

Sucks to be a yank (for the Americans).

One thing I’ve noticed in court documents simply moving tokens from a to b is considered layering even though it’s all transparent and public.

Note it’s not illegal to say to move funds from a western bank to a Chinese bank and then to another bank which obviously obfuscates as it’s different rails - so not sure how this bill can legally pass except fear tactics

Exactly! It's all about giving their criminal friends on Wall Street more power and monopoly through law!

America needs the ETFs as it will force the funds into the system rather than leaving it.

EU the same.

Not sure on the UK yet - bare in mind one of the largest tether owners is the bank roll to the conservatives - f**k if I was residing there I’d probably pony up a sizable amount to keep them from turning authoritarian alas beating a dead horse I will at some point renounce anyway.

Then they will come down on independent thinking governments - but we are seeing push back (see Malaysia and sanctions).

You truly need Russia to win for the wider democracy to win even if Ukraine is gutted because then Russia is too weak and you need a nasty country to point at so our own Goverments don’t become even more authoritarian… fucked up world lol

 

[Rotor]

so not sure how this bill can legally pass except fear tactics

Yes just fear tactics and psyops to try to scare the weak minded. They will make an example here and there to try to spread terror. Pretty much a Covid repeat with a crypto flavor.

 

[wellington]

Yes just fear tactics and psyops to try to scare the weak minded. They will make an example here and there to try to spread terror. Pretty much a Covid repeat with a crypto flavor.

It will pass don’t get me wrong - the fear tactics used to date will ensure that.

Sucks to be a yank (for the Americans).

One thing I’ve noticed in court documents simply moving tokens from a to b is considered layering even though it’s all transparent and public.

Note it’s not illegal to say to move funds from a western bank to a Chinese bank and then to another bank which obviously obfuscates as it’s different rails - so not sure how this bill can legally pass except fear tactics


America needs the ETFs as it will force the funds into the system rather than leaving it.

EU the same.

Not sure on the UK yet - bare in mind one of the largest tether owners is the bank roll to the conservatives - f**k if I was residing there I’d probably pony up a sizable amount to keep them from turning authoritarian alas beating a dead horse I will at some point renounce anyway.

Then they will come down on independent thinking governments - but we are seeing push back (see Malaysia and sanctions).

You truly need Russia to win for the wider democracy to win even if Ukraine is gutted because then Russia is too weak and you need a nasty country to point at so our own Goverments don’t become even more authoritarian… fucked up world lol

Update on this - chief of sanctions touched down in Malaysia today apparently for discussions after rebuffed the US.

Bare in mind this is a Goverment that stated in letter form it would target family members not just the administrators if they sanctioned Israel for its acts in Gaza.

The US under Biden truly has dropped the Veneer of “rules based order”.

I say under Biden - but I doubt very much he is truly comprehensive enough to be pulling the strings… which is concerning even more.

 

[Martin Everson]

Bare in mind this is a Goverment that stated in letter form it would target family members not just the administrators if they sanctioned Israel for its acts in Gaza.

Yeah I saw that naked to the point mafia style threat to ICC officials and their family members. The true face of US government is exposed on how they do diplomacy. Just imagine what they do behind closed doors to states such as Philippines etc in order to operate military bases or get their way.

In any case this crypto bill is a US thing and US will always do what does not make sense long term .