Coin Center Challenges Overly Broad Bank Secrecy Act, Advocates for Clearer Crypto Regulation

Coin Center, a prominent non-profit focused on cryptocurrency research, has recently criticized the Bank Secrecy Act (BSA) for its overly broad and ambiguous scope in a new report.

Challenging the Act’s Extensive Reach

The report, titled “Broad, Ambiguous or Delegated: Constitutional Infirmities of the Bank Secrecy Act,” scrutinizes the 1970 legislation, asserting that it grants excessive authority with its extensive and vague terminology. Coin Center particularly takes issue with the Act’s definition of a “financial institution,” which spans 425 words and includes 26 distinct sub-categories, encompassing entities ranging from travel agencies and pawnbrokers to investment bankers and commercial banks.

A Critical Look at “Money Transmitters”

Coin Center’s report expresses concern about the broad categorization of “money transmitters” within the definition of financial institutions. The Act describes them as “licensed senders of money or any other person who engages as a business in the transmission of funds.” This definition, Coin Center argues, is so expansive that it could potentially encompass any business involved in fund transfers, including routine payment acceptance for services.

The Ambiguity of the Act

The report argues that the wide interpretive scope of the Bank Secrecy Act either reflects fundamental ambiguity or indicates a deliberate attempt to make the statute broadly applicable. Coin Center suggests that such legislative vagueness is contrary to the principles of the rule of law, as it fails to provide clear guidance to ordinary citizens.

The Road to Effective Cryptocurrency Legislation

Coin Center’s critique comes at a time when both the Senate and the House are engaged in discussions to develop effective legislation and regulation for the cryptocurrency industry. However, due to political gridlocks, achieving consensus on regulatory frameworks might be challenging.

Tim Enneking, Managing Partner at Psalion and CEO of Presearch.com, Inc., commented on the situation, stating, “What you have in the United States is legislative paralysis, executive overreach, and the judiciary trying to control the situation. I don’t see that changing really anytime soon because of the split House of Representatives.”

Coin Center remains committed to highlighting these legislative issues, emphasizing that laws need to be clear and understandable to ensure compliance and uphold the rule of law.