United States Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN) introduced a new bill to combat illicit finance across the crypto sector on Wednesday.

Disrupting bad actors

Known as the Preventing Illicit Finance Through Partnership Act of 2024, the bill aims to coordinate efforts between federal agencies with private companies in the hopes of fighting illicit financial activity.

“Federal law enforcement agencies already have the tools to combat illicit finance—they just need to communicate with the private sector to deploy them most effectively,” said Senator Hagerty. “By fostering collaboration and information sharing, this bill will ensure that all parties at the table are working together to detect and disrupt bad actors.”

How it works

If approved, the Preventing Illicit Finance Through Partnership Act of 2024 would establish a pilot program chaired by the attorney general consisting of 20 money services organizations. The program would then allow federal agencies to share detected possible instances of illicit finance with the private sector entity in question and vice versa.

According to a recent press release from Senator Hagerty’s office, the bill would then provide “private companies a channel to alert federal agencies to any suspicious money transfers and sanctions evasion.” 

“There are bad actors in every industry and crypto assets are no exception but make no mistake – crypto itself is not the problem,” said Senator Lummis. “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.”

A collaborative solution

The Preventing Illicit Finance Through Partnership Act of 2024 is just one of several crypto-related bills that have been introduced in the past year. Most notably, Senator Elizabeth Warren has been able to garner support for her Digital Asset Anti-Money Laundering Act, which would enforce stringent compliance requirements on key actors across the crypto space.

“While I believe that federal regulators must have the tools necessary to combat illicit finance and counter bad actors, I have significant concerns about the likely impacts of this legislation,” Senator Thom Tillis (R-NC) wrote in a letter voicing his opposition.

However, Lummis and Hagerty’s bill may be seen as a collaborative approach to solving issues facing the cryptocurrency sector.

“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,” Lummis concluded.

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