A banking law passed in the early 70s could have detrimental consequences for the Bitcoin mining industry in the United States.
The U.S. government has long been imposing strict anti-money laundering and know-your-customer regulations on the crypto industry.
However, none of those laws have been enough to stomp the development of the sector, which has been flourishing despite tight regulations.
However, the country has a law in place that, if applied, could have serious consequences for the crypto space.
According to MIT Technology Review, the U.S. government could, someday, try and use the law to impose stricter control over the use of certain blockchain-based cryptocurrencies.
Passed by the U.S. Congress in 1970, the Bank Secrecy Act (BSA) requires financial institutions in the United States to collaborate with the government when investigating cases of suspected money laundering and fraud.
The purpose of the law, also known as the Currency and Foreign Transactions Reporting Act, is to prevent ‘financial institutions,’ i.e. banks, from becoming intermediaries in illicit activity.
The BSA, therefore, mandates that institutions collect private information about their users and report it to the U.S. Treasury Department.
Expanding the government’s grip of cryptocurrencies under the BSA
David Murray, the vice president of the Financial Integrity Network, testified before a subcommittee of the U.S. Senate earlier this week and called for stricter control over the use of cryptocurrencies.
Murray, whose Washington-based company focuses on combating illicit finance, said that cryptocurrencies are becoming a go-to means to fund human trafficking operations.
Crypto payments, Murray said in his testimony, allow for greater anonymity and are almost impossible to track.
“Virtual assets are vulnerable to illicit finance because they offer rapid and irrevocable settlement and the potential for anonymity,” he said.