US Senate Introduces Bill to Regulate DeFi and Crypto Industry, Impose KYC and Sanctions

The US Senate is considering a new bill, the Crypto-Asset National Security Enhancement Act of 2023, which aims to regulate decentralized finance (DeFi) protocols by imposing stringent anti-money laundering (AML) requirements. The bill would require DeFi protocols to implement bank-like controls on their users, including identity verification, reporting suspicious activity, and blocking sanctioned individuals. It also expands the Treasury Department's authority to police alleged money laundering in non-traditional financial settings, including the crypto industry. The bill was introduced by Senator Jack Reed and has bipartisan support.