US Senators Introduce Bill ‘to Combat Illicit Use of Crypto Assets’ Through Public-Private Partnership

U.S. lawmakers have introduced a bill “to combat the illicit use of crypto assets.” The Preventing Illicit Finance Through Partnership Act “will allow federal regulators to work with the private sector to gain insight into the often-misunderstood world of crypto to weed out bad actors without crushing an entire emerging industry,” Senator Cynthia Lummis described.

Preventing Illicit Finance Through Partnership Act 2024

U.S. Senators Bill Hagerty (R-TN) and Cynthia Lummis (R-WY) introduced the Preventing Illicit Finance Through Partnership Act of 2024 on Wednesday. Hagerty and Lummis are members of the Senate Banking Committee.

The bill seeks to “establish an information-sharing pilot program to combat the illicit use of crypto assets,” according to the bill’s text. The legislation targets illicit finance through enhanced communication between federal law enforcement agencies and private companies. Senator Lummis opined:

There are bad actors in every industry and crypto assets are no exception but make no mistake — crypto itself is not the problem.

“The Preventing Illicit Finance Through Partnership Act will allow federal regulators to work with the private sector to gain insight into the often-misunderstood world of crypto to weed out bad actors without crushing an entire emerging industry,” the lawmaker from Wyoming described. “This public-private partnership will help inform regulators about the use cases for crypto assets and clear the way to establishing federal rules of the road that will keep the industry in America and solidify crypto’s role as the next frontier of financial innovation.”

The announcement provides some details of the pilot program to be established by the Preventing Illicit Finance Through Partnership of 2024, stating:

The program would be chaired by the Attorney General and composed of 20 voluntarily participating money services businesses and cryptocurrency companies.

Ten of the 20 participants will be money services businesses and the other 10 will be private sector entities from the crypto industry. The pilot program shall terminate after five years of the date of enactment of the bill.

There are other efforts aimed at addressing crypto’s illicit use, including Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act. However, critics have dubbed Warren’s bill a “crypto ban” bill. This perception has fueled counter efforts like the “Stop the Crypto Ban” petition on Change.org. In addition, Warren, alongside 100 other lawmakers, sent a letter in October last year urging the Biden administration to tackle the role of crypto in illegal activities and terrorism. “Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter reads.

However, the volume of illicit activities in crypto transactions pales in comparison to those in traditional finance. Blockchain data analytics firm Chainalysis said Thursday that “2023 saw a significant drop in value received by illicit cryptocurrency addresses.” The firm noted: “Our estimate for the share of all crypto transaction volume associated with illicit activity also fell, to 0.34% from 0.42% in 2022.”

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