- New crypto legislation introduced by Brad Sherman, aimed at financial regulation and national security.
- The amendment empowers the Treasury Secretary to halt crypto dealings with Russian entities.
- Reports required for U.S. taxpayers with significant offshore crypto transactions, enhancing transparency.
This article delves into Brad Sherman’s amendment to the NDAA bill, emphasizing crypto regulations to bolster U.S. national security and financial transparency.
Introduction of the Crypto Amendment
California Democrat Brad Sherman has recently submitted an influential crypto amendment to the House Rules Committee. This amendment is poised to be incorporated into the critical National Defense Authorization Act (NDAA) bill.
The submission of this amendment highlights the growing concerns around the use of cryptocurrencies in international transactions, which may pose risks to U.S. national security interests.
Increasing Regulatory Measures
By embedding his amendment into the NDAA, Sherman seeks to equip the U.S. Treasury and financial regulators with expanded capabilities to scrutinize and control digital asset operations. This initiative aims to counter potential threats from foreign entities more effectively.
Discretionary Prohibition of Transactions with Russian Affiliates
Sherman’s proposed amendment to the NDAA prominently focuses on providing the U.S. Treasury Secretary the explicit authority to prevent digital asset trading platforms and transaction facilitators under U.S. jurisdiction from engaging with cryptocurrency wallets linked to Russia.
According to the amendment, the Treasury Secretary can enforce this prohibition if it is deemed essential for the national interest of the United States. Within 90 days of exercising this power, the Treasury Secretary must present a comprehensive report to the relevant congressional committees and leadership, detailing the rationale behind such a determination. This provision intends to block Russian-affiliated entities from using cryptocurrencies to bypass economic sanctions or engage in activities harmful to U.S. national security.
Reporting Requirements for Large Offshore Crypto Transactions
Sherman’s amendment also tackles the reporting of substantial offshore cryptocurrency transactions. Specifically, it mandates the Financial Crimes Enforcement Network (FinCEN) to require U.S. taxpayers to report any transaction exceeding $10,000 in value if it involves digital assets held in one or more accounts outside of the United States.
This reporting must be carried out using FinCEN Form 114 (FBAR), as outlined in section 1010.350 of title 31, Code of Federal Regulations, and in accordance with section 5314 of title 31, United States Code. This requirement is to be enforced within 120 days of the Act’s enactment, aimed at improving transparency and preventing the use of offshore accounts to evade taxes or launder money through cryptocurrencies.
Conclusion
Brad Sherman’s proposed amendment to the NDAA bill underscores the escalating attention on cryptocurrencies and their potential threat to national security. By granting the U.S. Treasury Secretary the authority to regulate cryptocurrency transactions and mandating rigorous reporting requirements for large offshore transactions, this amendment aims to enhance the United States’ financial oversight and safeguard against risks posed by foreign entities. As digital assets continue to evolve, regulatory frameworks such as these become integral to maintaining economic integrity and national security.
