IDONTSEE the Benefit: How the CANSEE Act Could Upend U.S. Crypto and Privacy

By akohad Jan17,2024

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Explore the pivotal CANSEE Act with our TLDR analysis. Discover how it reshapes U.S. cryptocurrency regulation, impacts DeFi, and balances national security with innovation and privacy.

Pencil sketch of a female politician slamming her fist on a table, with tiny figures of people and programmers dodging to avoid being crushed, symbolizing regulatory impact on tech industry.
Political Pressure. Image created using DALL-E.

The Crypto-Asset National Security Enhancement (CANSEE) Act has sparked intense debate in the U.S. Senate, targeting the burgeoning decentralized finance (DeFi) and cryptocurrency sectors. This legislation, introduced by Senators Reed, Rounds, Warner, and Romney, aims to extend anti-money laundering and sanctions compliance to the DeFi sector, raising critical questions about privacy, innovation, and constitutional rights.

The CANSEE Act could fundamentally alter how digital assets and DeFi operate in the U.S., affecting investors, developers, and users alike. It touches on the delicate balance between national security and individual privacy rights, and its outcome could set a precedent for future tech regulation.

  1. Broad Definition of Control: It proposes a wide interpretation of “control” over digital asset protocols, potentially encompassing anyone from governance token holders to open-source software contributors.
  2. Sanctions and Penalties: Extends sanctions violation penalties to digital asset protocol backers and facilitators, impacting major investors and software publishers.
  3. Bank Secrecy Act Extension: Proposes to treat digital asset facilitators and backers as financial institutions, imposing stringent reporting requirements.
  4. Virtual Currency Kiosks: Sets new compliance obligations for operators, affecting transactions and user privacy.
  • Digital Asset Protocol Backers: Those investing significantly in DeFi projects.
  • Software Developers: Creators of applications facilitating digital asset transactions.
  • Virtual Currency Kiosk Operators: Businesses…

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By akohad

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