Democrats to introduce bill targeting crypto mixing services
|- Democrats to introduce bill this week that would "clamp down" on crypto mixers.
- Rep. Sean Casten (D-Ill.) calls mixing protocols "money laundering channels."
- Republicans and Democrats argue over the SEC's actions against crypto companies, citing the DEBT Box case.
Rep. Sean Casten (D-Ill.) revealed in a House hearing on Tuesday that Democrats are planning to issue a bill this week that would target crypto-mixing protocols. Democrats and Republicans also clashed over the SEC's recent action against crypto companies.
Democrats to introduce bill against crypto mixing protocols
In a recent House Financial Services capital markets subcommittee hearing titled "SEC Enforcement: Balancing Deterrence with Due Process," Rep. Sean Casten (D-Ill.) said that the House Democrats are planning to introduce a bill this week to "clamp down" on crypto mixing protocols.
"Until we've studied and have a good audit trail, the presumption should be that these are money laundering channels," said Casten. "Let's go through and get that cleaned up and fixed," he added.
According to Casten, the bill would be supported by Emanuel Cleaver (D-Mo.), Bill Foster (D-Ill.), and Reps. Brad Sherman (D-Calif.).
Read more: US intensifies battle against crypto privacy protocols following crackdown on Samourai Wallet
Such a bill follows the US Department of Justice's (DOJ) recent targeting of crypto mixing protocols with the arrest of the two Samourai Wallet developers. The DOJ alleged that Samourai Wallet operated as an unregistered money-transmitting business, processing $2 billion in unlawful transactions.
The DOJ also helped in the sanctioning of the Tornado Cash mixing protocol while charging its founders, Roman Storm, and Roman Semenov, with laundering more than $1 billion in criminal proceeds.
Meanwhile, Rep. Maxine Waters, D-Calif., supported the SEC's recent enforcement actions against crypto companies. "The crypto industry, which publicly claims to want regulation, is suing the SEC for trying to regulate it, despite the fact that the courts agree that the laws on the books are applicable," said Waters.
This follows the SEC's recent action of serving Wells Notice to popular crypto companies like Uniswap Labs, Consensys, and Robinhood Crypto. Consensys responded to the SEC's move by suing the agency over "unlawful seizure of authority over Ethereum."
Also read: Tornado Cash developer Roman Storm’s motion to dismiss accusations rebuffed by US DOJ
Rep. Bill Huizenga (R-Mich.) cited SEC lawyers' abuses in the DEBT Box case and how a federal judge in Utah ordered the agency to pay sanctions. He further noted the SEC's increasing use of Wells Notice at an astonishing rate, especially when it comes to digital assets."
However, Rep. Brad Sherman, D-Calif, said it was appropriate for the SEC to charge the firm. He argued that the crypto industry "has fought tooth and nail against any meaningful regulation."
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