A proposed Senate Banking Committee market structure bill could potentially facilitate illicit finance within decentralized finance (DeFi), according to expert Lee Reiners. The bill suggests that decentralized protocols lacking unilateral control might be exempt from traditional anti-money laundering (AML) and Bank Secrecy Act (BSA) regulations. This proposal follows the 2022 OFAC sanction on Tornado Cash, which resulted in a 60% decline in its monthly volume.
Critics express concern that the bill could enable developers to redeploy crypto mixing services without regulatory oversight. However, Ari Redbord of TRM Labs argues that the bill is designed to protect legitimate developers rather than facilitate money laundering. The bill's final version is still under discussion as lawmakers continue to debate its provisions.
Senate Bill May Create 'Illicit Finance Superhighway' for DeFi, Expert Warns
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