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New Bill Would Require People to Disclose Cryptocurrency Holdings at the Border

A new bill introduced in late May in the United States Senate would require people entering or leaving the United States with $10,000 or more in cryptocurrency to declare their holdings to US Customs and Border Protection agents. The bill has been introduced in the 115th Congress as S.1241, and known as the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017. Currently this regulation is already applied to cash and money orders. The bill’s prime sponsor is Republican Senator Chuck Grassley of Iowa. The bill has some bipartisan support, co-sponsors of the bill include Democratic Senator Dianne Feinstein of California, Democratic Senator Sheldon Whitehouse of Rhode Island, and Republican John Cornyn of Texas.

Cryptocurrencies are not the only thing which would be subject to disclosure to border agents under the new bill, as prepaid mobile phones, coupons, and gift vouchers would also be subject to disclosure. Failure to disclose cryptocurrency holdings worth over $10,000 would be punishable by criminal penalties that include up to 10 years in prison, as well as be subjected to civil asset forfeiture. Civil asset forfeiture is a process which enables government to take property without a criminal conviction, and sometimes even without an arrest. Civil asset forfeiture is different from criminal asset forfeiture in that under civil asset forfeiture your property can be seized without being convicted of a crime. Law enforcement agencies are able to keep what they seize under the civil asset forfeiture process. Many people have called for the reform of asset forfeiture laws, and some privacy activists have called the practice of civil asset forfeiture unconstitutional, a violation of the 4th amendment’s protection from unreasonable searches and seizures.

The bill also expands the surveillance state by authorizing customs agents to conduct wiretaps on people that they suspect may be transporting “excess” cryptocurrency holdings. If the bill is enacted, within 18 months the Secretary of Homeland Security and the Commissioner of the US Customs and Border Protection agency will deliver a report to Congress outlining their strategy for detecting and interdicting cryptocurrencies, as well as an assessment of what infrastructure is needed to implement their strategy. Under the proposed legislation, cryptocurrency exchangers like Shapeshift, as well as coin tumbler services, would be defined as financial institution under the Bank Secrecy Act. The Bank Secrecy Act is an anti-money laundering law which as enacted in 1970 and was amended by Title III of the USA PATRIOT Act.

An almost identical version of this legislation was introduced in 2011 and failed to pass. It is likely the legislation was originally intended to target centralized digital currency exchanges such as Liberty Reserve, which was shut down by the federal government in 2013. The legislation does not define “digital currency” or differentiate between centralized and decentralized digital currency, unlike FinCEN and the Department of Treasury, which has clearly defined terms for “centralized virtual currency” and “decentralized virtual currency”.

Many cryptocurrency advocates say the bill is unnecessary as FinCEN has already released guidance and regulations on cryptocurrency. “While we encourage thoughtful and meaningful study of the prevention of cross-border financial crime, the storage of virtual currency carries different and complex considerations than those attributable to prepaid access,” President of the Chamber of Digital Commerce Perianne Boring told CoinDesk. The Chamber of Digital Commerce and Coin Center, two of the biggest lobbying firms in Washington DC that advocate for cryptocurrency, are currently in contact with legislators to discuss the bill. The bill is currently being considered in the Senate Committee on the Judiciary.

Shortly before this bill was introduced in the United States Senate, the United States House of Representatives’ Homeland Security Committee’s Subcommittee on Counterterrorism and Intelligence began working on changes to a proposed bill by Representative Kathleen Rice of New York. Rep. Rice’s bill would call for the Under Secretary of Homeland Security for Intelligence and Analysis to create a threat assessment on how people could use cryptocurrencies to further terrorist activity.

11 comments

  1. I really don’t see how the fuck they’re going to determine if someone is carrying cryptocurrencies on them. Are they going to take their laptop and run through it? Not only is this non-constitutional, it’s not going to do any fucking good. All the smart criminals will just take half a private key, and the other half they’d send to the destination they’re going to. Honestly, we will win this one. Just sucks it’ll take a long battle to get this shit down.

    • Agreed. And by even mentioning they’re gonna do this, they’re giving an early incentive for those for free market to prepare early. This is really dumb.

  2. What defines ‘ownership’ of a Crypto currency. More importantly what constitutes crypto currency — a few tokens owned in a random blockchain, is one obliged to call it currency.

  3. What if the backup file is in the cloud? What if you forgot your pw? What if the US government were to become fascist. jack booted, train robbery thugs? Oh, they are.

  4. Patricia Merriel

    how can americans be so ignorant?

    • People are ignorant everywhere. No one outside of a few technically minded understands digital currency and eyes glaze over when you start talking encryption, block chain, etc. America was the last bastion of privacy and anonymity but that has all been destroyed. Now it exists no where or only with great effort. Too bad. I’m going kicking and screaming though. I’ll outrun the really bad stuff. I hope.

  5. Fuck Politicians

    Organized governments are the puppets for a world-wide dictatorship that has been brewing for many decades. Politicians are doing the dirty job so that people who want to be “lawful” get accustomed to the increased slavery.

    • Yes, under the guise of UN, NATO, CAIR, S. Poverty Law Ctr. Various evil corporations like Northrup Grumman, Raytheon, ATT, Comcast…

      Not to forget the war on drugs sponsored by big pharam and the treatment ind complex and private prisons.

      Tyranny is alive and well.

  6. what part of decentralized do they not understand.

  7. Eternal brotherhood

    Uncle Sam suck! (No not you the user LoL !!). Although I got to correct you a bit cause not only are they all those things you said but much much worse all in the name of “terrorism” !!!

  8. fuck damn u#a rules . better declare nothing at border and stay safe. They can’t provide airplane security , security at public places and only money talking … because in services there are junk ppl as everywhere.

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