Research Summary
The report discusses recent amendments to the National Defense Authorization Act (NDAA) and the Intelligence Authorization Act (IAA) that focus on cryptocurrency regulations. It also covers the Senate Appropriations Committee hearing on the 2025 federal budget requests for the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Key Takeaways
Crypto-Related Amendments to NDAA
- Proposed Amendments: Several crypto-related amendments were proposed to the NDAA, including one that would have given the Treasury Secretary authority to prohibit digital asset trading platforms from transacting with cryptocurrency addresses in Russia. However, this amendment did not receive further consideration.
- Blockchain Amendments: Other blockchain-related amendments were included in the House rule, such as one that establishes a working group to identify potential applications for blockchain technology at the Department of Defense.
Amendment to IAA
- Expanded Sanctions: An amendment to the IAA proposed by Senate Intelligence Chair Mark Warner would expand sanctions authorities related to digital asset transactions. This amendment would require the President and Treasury to identify and designate for secondary sanctions any foreign person or group that facilitates transactions with specially designated nationals.
- Revised PATRIOT Act: The amendment would also revise and expand Section 311 of the PATRIOT Act, allowing the Treasury to prohibit US financial institutions from engaging in certain transactions deemed to be a primary money laundering concern.
Senate Appropriations Committee Hearing
- SEC and CFTC Testimony: SEC Chair Gary Gensler and CFTC Chairman Rostin Behnam testified before the Senate Appropriations Committee on the 2025 federal budget requests for their respective agencies. Gensler emphasized the need for greater regulation of capital markets, while Behnam highlighted the importance of technological innovation in derivatives markets.
- Concerns Over SEC Enforcement: Senators expressed concern that the SEC is using its resources to pursue an enforcement campaign against the digital asset industry, rather than focusing on its mandate to protect American investors. Gensler defended the agency, arguing that many participants in the digital assets market have not properly registered.
Actionable Insights
- Monitor Regulatory Developments: Stakeholders in the digital asset space should closely monitor developments in cryptocurrency regulations, particularly those related to the NDAA and IAA amendments. These regulations could have significant implications for the industry.
- Engage with Policymakers: Crypto industry participants should engage with policymakers to ensure that their interests are represented in the legislative process. This could involve advocacy efforts or providing input on proposed regulations.
- Compliance Measures: Given the increased regulatory scrutiny, digital asset platforms and other industry participants should ensure they have robust compliance measures in place. This includes proper registration and adherence to anti-money laundering regulations.
