New U.S. Senate Bill: Venture capital investing over $25 million in DeFi projects must hold DeFi platforms accountable for violating sanctions

ChainCatcher News, Democratic Senators Jack Reed and Mark Warner, along with Republican Senators Mike Rounds and Mitt Romney, have jointly introduced a new Senate bill that will impose strict anti-money laundering (AML) requirements on DeFi protocols. The bill also plans to require DeFi protocols to implement bank-like controls over their user base, mandating that entities controlling DeFi must review and collect information about their customers, maintain an anti-money laundering program, report suspicious activities to the government, and prevent sanctioned individuals from using their protocols.

The bill will also hold venture capital firms and other large investors liable in certain cases for violations of sanctions occurring on DeFi platforms, to prevent criminals from using DeFi to launder money and evade sanctions. If sanctioned individuals (such as Russian oligarchs) use DeFi services to circumvent U.S. imposed restrictions, those controlling DeFi projects will be held accountable for facilitating the violations. If no one controls the service, this liability will shift to investors who have invested over $25 million in the project. (Source link)