Congress Inches Toward Legislating Crypto Space; Starts With Cryptos and Sex Trafficking

The U.S. Congress continues to take baby steps towards enacting some kind of legislation for the crypto space.

A bill was expected to be introduced this week that would specifically address cryptocurrencies and their use in sex and drug trafficking.

A mere study

The legislation, which still does not have a bill number, so it has not formerly been introduced, is called the “Fight Illicit Networks and Detect (FIND) Trafficking Act.”

The bill would require the U.S. Comptroller General to carry out a study on how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking.

The bill states:

Not later than one year after enactment, the legislation would require the Comptroller General to submit the report to the Committee on Banking, Housing, and Urban Affairs and the Committee on Financial Services a report that summarizes the result of the study and include recommendations for legislative or regulatory action that would improve the efforts of Federal agencies to impede the use of virtual currencies and online marketplaces in facilitating sex and drug trafficking.

A long way to go

The fact that this bill is simply calling for a study to be conducted is why I call it a baby step by Congress when it comes to legislating cryptos. This shows that Congress is nowhere near passing substantial legislation for the space.

It does highlight one of the main concerns lawmakers have about cryptos, and that relates to how they are used for illicit activities.

We reported to you earlier this year about a panel of crypto experts visiting the Hill to try to explain the space to members of a House Finance Committee.

One of the experts, Robert Rosenblum, a partner with Wilson Sonsini Goodrich & Rosati, told the Congressional members spoke about members passing legislation establishing a comprehensive legislative and regulatory system governing Blockchain and cryptocurrency.

Rosenblum added that, for now, it is too early to know exactly what such a system would look like, but he said he believed there are some principles and approaches that Congress can identify. These can serve as a framework to begin developing that legislation.