Sec. 9. Anti-money laundering innovation
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Beginning on the date that is 30 days after the date of enactment of this Act, and for a period of 60 days thereafter, the Secretary of the Treasury shall seek public comment to identify innovative or novel methods, techniques, or strategies that regulated financial institutions use, or have the potential to use, to detect illicit activity, such as money laundering, involving digital assets, including comments with respect to— application program interfaces; artificial intelligence; digital identify verification; and use of blockchain technology and monitoring.
Upon completion of the public comment period described in subsection (a), the Secretary of the Treasury shall conduct research on the innovative or novel methods, techniques, or strategies that regulated financial institutions use, or have the potential to use, to detect illicit activity, such as money laundering, involving digital assets that were identified in such public comment period. With respect to each innovative or novel method, technique, or strategy described in paragraph (1), the Financial Crimes Enforcement Network shall evaluate and consider the following factors against existing methods, techniques, or strategies:
Improvements in the ability of financial institutions to detect illicit activity involving digital assets. Costs to regulated financial institutions. The amount and sensitivity of information that is collected or reviewed. Privacy risks associated with the information that is collected or reviewed. Operational challenges and efficiency considerations. Cybersecurity risks. Effectiveness of methods, techniques, or strategies at mitigating illicit finance. As part of the national strategy for combating terrorist and other illicit financing required under sections 261 and 262 of the Countering America’s Adversaries Through Sanctions Act ( Public Law 115–44 ; 131 Stat. 934), the Secretary of the Treasury shall consider— the source of illicit activity, such as money laundering and sanctions evasion involving digital assets; the effectiveness of and gaps in existing methods, techniques, and strategies used by regulated financial institutions in detecting illicit activity, such as money laundering, involving digital assets; the impact of existing regulatory frameworks on the use and development of innovative methods, techniques, or strategies by regulated financial institutions; and any foreign jurisdictions that pose a high risk of facilitating illicit activity through the use of digital assets to obtain fiat currency.
Not later than 2 years after the date of enactment of this Act, the Financial Crimes Enforcement Network shall issue public guidance or notice and comment rulemaking, based on the results of the research and risk assessments required under this section, relating to the following: The implementation of innovative or novel methods, techniques, or strategies by regulated financial institutions to detect illicit activity involving digital assets. Best practices for payment stablecoin issuers to identify and report illicit activity involving the payment stablecoin of a permitted payment stablecoin issuer, including, fraud, cybercrime, money laundering, financing of terrorism, sanctions evasion, and insider trading.
Best practices for payment stablecoin issuers’ systems and practices to monitor transactions on blockchains, digital asset mixing services, tumblers, or other similar services that mix payment stablecoins in such a way as to make such transaction or the identity of the transaction parties less identifiable. Not later than 2 years after the date of enactment of this Act, and annually thereafter for a period of 4 years, the Secretary of the Treasury shall submit to the chairs and ranking members of the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report, and provide a briefing of such report, on— legislative and regulatory proposals to allow regulated financial institutions to develop and implement novel and innovative methods, techniques, or strategies to detect illicit activity, such as money laundering and sanctions evasion, involving digital assets; the results of the research and risk assessments conducted pursuant to this section; and efforts to support the ability of financial institutions to implement novel and innovative methods, techniques, or strategies to detect illicit activity, such as money laundering and sanctions evasion, involving digital assets.
Nothing in this section shall be construed to limit the existing authority of the Secretary of the Treasury or the primary Federal payment stablecoin regulators to, prior to the submission of a report required under this section, use existing exemptive authorities, the no-action letter process, or rulemaking authorities in a manner that encourages regulated financial institutions to adopt novel or innovative methods, techniques, or strategies to detect illicit activity, such as money laundering, involving digital assets.
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- 131 Stat. 934
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