Pro
The CANSEE Act
Key Insights
- The CANSEE Act is bipartisan legislation that would require certain decentralized protocol developers and investors to comply with sanction and anti-money laundering laws or face civil or criminal penalties.
- Key concerns raised against the bill include that it would end DeFi in the U.S., violate free speech protections under the First Amendment, and grant the Treasury Secretary expansive discretionary authority.
- The CANSEE Act is unlikely to pass this Congress, but it shows even moderate Senate Republicans and Democrats are concerned with bad actors using crypto for illicit finance.
- A bipartisan amendment to a defense authorization bill is more likely to pass this Congress. It would require the Department of Treasury to assess the adequacy of anti-money laundering programs at financial institutions with respect to crypto assets, and to report to Congress on the use of anonymity-enhancing software in illicit finance.
Overview
Senators Jack Reed (D-RI), Mike Rounds (R-SD), Mark Warner (D-VA), and Mitt Romney (R-UT) introduced the Crypto-Asset National Security Enhancement (“CANSEE”) Act on July 18, 2023. The Senate Banking Committee has jurisdiction over the bill.1
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George Leonardo is the founder of Cap Hill Crypto, a solo-entrepreneur venture focused on providing nonpartisan insights and analysis on U.S. federal crypto policy. Previously, he worked on Capitol Hill for Senator John Cornyn and as a litigation associate at Milbank LLP.