US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

On November 28, 2017, the US Senate, Committee of the Judiciary held a hearing regarding bill S.1241: Modernizing AML Laws to Combat Money Laundering and Terrorist Financing. Despite little attention being given to digital currencies during the hearing, bill S.1241 itself would amend the definition of 'financial institution' in the United States Code to include digital currencies and digital exchanges. This could have alarming consequences for users of cryptocurrencies both in the US and abroad.

Bill S.1241 would amend the definition of 'financial institution,' in Section 5312(a) of title 31, United States Code, to include "an issuer, redeemer, or cashier of prepaid access devices, digital currency, or any digital exchanger or tumbler of digital currency." Currently, the definition of 'financial institution' includes banks, trust companies, credit unions, currency exchanges, etc.

In her introduction, Mrs. Feinstein, Ranking Member of the Judiciary Committee, said (31:35), "The bill criminalizes intentionally concealing ownership or control of a bank account." Although, during the hearing, no further clarifications were given as to the effects this would have on the cryptocurrency community, based on the amended definition of 'financial institution', it seems clear enough that the bill would "criminalize [those] intentionally concealing ownership or control of a [digital currency or digital exchange] account." Wow. Let this sink in for a minute...

The US senate is proposing a bill to make criminals out of anyone intentionally concealing ownership or control of a digital currency or digital exchange account. What's more, according to the hearing's prolonged discussion of US law enforcement's handling of foreign banks and financial institutions, this bill is certain to have far-reaching effects on not only US citizens but the global community as a whole.

If the above statement describes you, it is strongly recommended that you watch the hearing with this new definition of 'financial institution' in mind. If you've already watched the hearing, watch it again, but this time replace all mentions of 'banks and financial institutions' with 'digital currencies and digital exchanges.' The implications are really rather alarming.

Interestingly enough, Ms. Kathryn Haun Rodriguez, a Coinbase Board of Directors Member, made absolutely no mention of digital currencies or digital exchanges in her testimony; nor was she asked any questions pertaining to these topics.

Conversely, in her July 2017 written testimony to the US House of Representatives Committee on Financial Services and Subcommittee on Terrorism and Illicit Finance, she stated that some users of digital currencies use them "to conceal and move illicit proceeds because of the perception that virtual currency is untraceable."

Also in her prior written testimony, she stated that "the FinTech industry could be a very helpful partner to the government in addressing national security concerns;" that "investigators like digital footprints and that is exactly what digital currencies provide;" and that "of course, we can only follow the money to an individual or group if they used a Regulated exchange, one that follows basic AML/KYC laws." Advertisement

Contrary to the bill itself, the hearing was noticeably lacking in references to cryptocurrencies; although there was some limited mention of such.

Ms. Klobuchar (2:16:58):

"Is this transition we're seeing from cash to digital going to make it easier or harder for law enforcement to track these money laundering cases, and you think these drug cartels are gonna start going cash free, and what do you do about it?"

Mr. John A. Cassara (2:17:15):

"Senator, I'm just glad I had my career when I did because I don't know what I'd do trying to follow the money when it comes to digital currencies, it's extremely, extremely challenging...I think if you look at the metrics, the metrics suggest today [that] digital currencies are a small fraction of the threat that we face. That's not to say it's gonna be the case in 5-10 years from now. We're right at a crossroads, and it's going to be very, very interesting to see what goes forward."

Due to the probable negative implications for the global cryptocurrency community, hopefully the interpretation of bill S.1241 in this article is proven incorrect; however, at this point, it seems fairly clear (at least to me, the author) that this is the intent behind the bill. If this is indeed the case, it will be the most recent attack on a growing list of State-backed attacks against the crypto-community.

Furthermore, from the noticeable lack of references made to digital currencies during the hearing, it would appear this bill is yet another underhanded attempt of the US Government to further erode global freedoms and civil liberties, which markedly began with the introduction of the Patriot Act, shortly after the 9/11 attacks.

As Tone Vayes mentioned, it would have been nice if Andreas Antonopoulos was there to impart some of the wisdom he shared with the Canadian Senate, on October 8, 2014.

Tone Vayes' summation*: "It's bad...I think it's gonna end in a very confrontational way between Bitcoin--even Bitcoin holders and users--and the US Government."

Jimmy Song's summation*: "Yeah, the nice thing about laws is they take a long time..."

Indeed it will be "very, very interesting to see what goes forward." If this bill passes, how many of you future criminals out there are still set on hodling?

*to be fair, neither had yet watched the entire hearing.

Full Disclosure: Landon Mutch is a contributor to the Lightning Network, a layer-two Bitcoin protocol, also BTCManager is scamming it's writers and not paying them :(.


Comments


[102 Points] STFUMandy:

I guess we know why why Monero is blowing up.


[83 Points] nateklly:

The only reason they hate BTC is because it's a currency they can't control. This complete bullshit


[66 Points] MenuBar:

Okay, so...

Can they help me reclaim the 18 bitcoins I'm hiding that I bought way back for only 36¢ each and lost the string of numbers I was supposed to remember?

I'll split it halfsies with them.


[41 Points] scoobydrool:

if i boof da bitcoin is that intentionally concealing ownership


[40 Points] VillianV1:

Anytime they wanna fuck people over its always in the name of terror. Bullshit


[22 Points] C_Lana_Zepamo:

If they make digital currency illegal, start with the fucking lootboxes.


[16 Points] mugwumpthecokefiend:

Time for big hodlers to start making donations to their local politicians, and imparting information regarding the utility of cryptocurrencies. People have made enough on btc alone to pay off a couple of dozen politicians.


[11 Points] lordredvampire:

Just encrypt your HDD/SSD/USB so LE can't tell if you have bitcoin or not. Simple.


[11 Points] Intergalactic_Reborn:

Fascism 101


[10 Points] lovehighmusic:

Our species deserves to blow it self up at this point, I don’t care anymore. Ridiculous af I’m sick of it


[9 Points] conspiracy_thug:

Cant we just have privacy?


[7 Points] FunkyJallday:

Patriot act at its finest. Anything and I mean anything they won’t to control they’ll skip it right in the current literature. Constantly updating to see fit. US government want control of each and everything we have a part of.


[7 Points] DextroShade:

Monero laughs at the attempts by the petty, worthless tyrants in our government to control it.


[7 Points] DarknessIsVisitingMe:

Funny they had no problem selling Ross's coins to fund their bullshit war on drugs and whatever else. Fucking govt are such hypocrites.


[6 Points] SamFlynn1288:

Bitcoin should be treated like cash. It’s basically virtual cash. U can buy drugs with bitcoin sure, same with cash. But you don’t see people advertising, hey I have $10,000 cash hiding under my mattress.


[4 Points] legalize-drugs:

Fuck Dianne Feinstein. There's a progressive Democrat running to challenge her. Let's get this fascist out of the Senate: http://beta.latimes.com/politics/la-pol-ca-hartson-senate-announce-20171102-story.html


[4 Points] MassAppeal_UK:

Fuck their bullshit


[2 Points] urbananimall:

They just want their cut, and they aren't going to stop until they get it.


[2 Points] brightmoor:

Ms. Kathryn Haun Rodriguez, a Coinbase Board of Directors Member

Interesting. I believe that’s the former AUSA that prosecuted Shaun Bridges & Carl Mark Force for the btc thefts. Looks like she got married though as I believe she was just Kathryn Haun when all that went down.


[2 Points] zippin_sizzurp:

oh cool so HSBC launders billions of dollars for drug cartels no questions asked but those of us living in the real world have to play by wall street/d.c. hacks' bullshit "rules"? fuck that, imma buy hella monero asap


[1 Points] crazynate386:

Lol gotta make one more point. Do we expect that they would make or propose a law with out knowing how they can enforce it??

I think this is a question that we all need to ask.


[1 Points] 37thTimesACharm:

This interpretation doesn't make any sense. Are they making it illegal to conceal cash in your wallet? Then why would it be illegal to conceal bitcoins on your computer?

A "digital currency account" would be an account with an exchange or wallet service like Coinbase. Just as a bank account is your account with a bank, not the money in your safe at home.

I would recommend reading the actual bill to see what it does rather than combining two quotes from completely different context into a conclusion that doesn't even logically follow from that.


[-2 Points] browhodouknowhere:

Oh bit coiners it was fun wasn't it?


[-3 Points] None:

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