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Making the Bank Secrecy Act even worse: Kill Senate Bill 1241

by: Claudine Gindel   2017-07-19


In late May, Senator Chuck Grassley, along with Dianne Feinstein, John Cornyn, and Sheldon Whitehouse introduced Senate Bill 1241. It's known as the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017". While we don't like to sensationalize news stories, the proposals in this bill are downright scary. 


The current law states that if anyone enters the United States with more than $10,000 in the form of cash (or money orders or bearer bonds), they need to fill out Form 105 and submit it to FinCEN (the Financial Crimes Enforcement Network).  The new bill proposes an expansion of the defintion of what must be reported to include:


"…[A]n electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.”


Digital or virtual currency is most often stored in a digital wallets, or “hot wallets,” through companies like Coinbase and BitGo, or they can be stored offline in a hardware wallet. Doesn't that mean that no matter where you go, if you are carrying your cell phone or laptop, you're "transporting" the currency? This new law says yes, you must declare more than $10,000 in digital currency holdings. 


The bill also proposes steep penalties if there is failure to comply. The government could file a secret motion with a federal judge for a restraining order that would freeze any account you own. While the order is in effect your phone could be wiretapped, and the government could monitor your web browsing records and emails. 


It isn't just groteque FBAR penalties, there are many reasons why  Bank Secrecy Act is a rather miserable failure.    It does not need to be made worse.


Feel free to Tweet the Senators to express your opinion about Senate Bill 1241:






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