Tillis unveils draft bill to ‘right-size’ regulatory approach to cryptocurrency

U.S. Sen. Thom Tillis (R-NC) on Monday released a discussion draft for forthcoming legislation that seeks to define and ensure certain industry requirements are followed by digital asset financial institutions.

“Congress needs to focus on right-sizing its regulatory approach to cryptocurrency, which requires building consensus among lawmakers, law enforcement, and stakeholders to protect consumers and fight illicit actors,” Sen. Tillis said. “This discussion draft represents a positive step towards right-sizing our approach to regulating cryptocurrency while preserving digital innovation.”

The Ensuring Necessary Financial Oversight and Reporting of Cryptocurrency Ecosystems (ENFORCE) Act of 2024 — which Sen. Tillis is working on with fellow Senate Banking, Housing, and Urban Affairs Committee colleague U.S. Sen. Bill Hagerty (R-TN) — would ensure Bank Secrecy Act anti-money laundering (BSA/AML) requirements apply to all centralized and customer-facing digital asset financial institutions, according to the discussion draft.

The bill also would clarify the U.S. Treasury Department’s authority to use an illicit finance policy tool against transactions and financial institutions associated with digital asset money laundering, and ensure bad actors and money launderers cannot be tipped off to investigations into their activities, the draft says.

“We must take action to stop bad actors who launder with cryptocurrency,” said Sen. Tillis. “However, this does not provide a license for heavy-handed, regulatory-obsessed lawmakers to regulate an entire industry into oblivion.”

Additionally, the bill seeks to establish a public-private task force that would coordinate digital asset illicit finance information sharing and best practices.

The bill also would establish formal examination standards for BSA/AML compliance for digital asset financial institutions, and would explicitly state a rule of construction to ensure that the measure doesn’t limit or restrict any current BSA/AML requirements, according to the draft. 

“I look forward to receiving feedback and working with my colleagues on the path forward,” Sen. Tillis said.