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[Note: the bill was originally posted at Scribd but it has since been removed; the removed version is available at Coindesk. The text before committee may vary somewhat, however, as the Congressional tracking site gov.track lists the bill as “not available yet” as of June 1. An online summary can still be obtained from the office of Senator Chuck Grassley (R-IA) who, along with Senator Diane Feinstein (D-CA), is the sponsor; it is currently in committee. All analysis here is based on the removed version and the summary. Those who find analysis of legislation to be tedious should skip to Section 13 which is a radical and political definition of cryptocurrencies.]

Unpacking S1241

Section 1: “Short Title, Table of Contents.”

Section 2: “Transportation or Transhipment of Blank Checks in Bearer Form.” This would amend Section 5316 of Title 31 of the United States Code. https://www.law.cornell.edu/uscode/text/31/5312 Any check entering or leaving the U.S. which is “drawn on an account containing more than $10,000” and has no dollar amount filled in would be “valued in excess of $10,000 for reporting purposes.” $10,000 is the threshhold for filing “a report with Customs and Border Protection.”

Section 3: “Increasing Penalties for Bulk Cash Smuggling.” Bulk cash smuggling means concealing $10,000 or more in currency or monetary instruments when you cross the border. Maximum punishment would increase to ten years imprisonment; fines would increase by an unspecified amount.

Section 4: “Section 1957 Violation Involving Commingled Funds and Aggregated Transactions.” Section 1957 deals with “the transfer of criminal proceeds...without the need to demonstrate” criminal intent. Two loopholes would be closed. 1) $10,000 in funds in which 'dirty money' have been comingled with 'clean money' would be considered $10,000 of dirty money. 2) A series of transactions under $10,000 that are “closely related in time, the identity of the parties, the nature of the transactions, or the manner in which they are conducted” would collectively meet the $10,000 threshold.

Section 5: “Charging Money Laundering as a Course of Conduct.” This would simplify the process of charging a person with money laundering and would “include conspiracies to violate...[the] prohibition of unlicensed money transmitting businesses as money laundering conspiracies.”

Section 6: “Illegal Money Services Businesses.” These are businesses that send “send criminal proceeds abroad” with nonregistration itself being a crime; the language of current statutes would change from “unlicensed” to “illegal.” Knowledge of the need to register would be no defense. The term “money transmitting business” would be replaced with “money services business” to include “entities...such as check cashiers” that “do not transmit money.” Penalties and fines would increase.

Section 7: “Concealment Money Laundering.” This applies to “couriers or mules.” The Supreme Court found that a defendant needed to know the transportation of proceeds was designed to be clandestine and precisely why they “were so transported” in order to be guilty. This section would greatly dilute or eliminate those requirements by changing the wording of statutes.

Section 8: “Freezing Bank Accounts of Persons Arrested for the Movement of Money Across International Borders.” A 30-day hold would be instituted and could be extended “for good cause.”

Section 9: “Prohibiting Money Laudering through Hawalas, Other Informal Value Transfer Systems, and Closely Related Transactions.” This would redefine what constitutes a money laundering offense when it involves “a set of parallel or dependent transactions.” All would be considered “a single plan or arrangement.”

Section 10: “Restoring Wiretap Authority for Certain Money Laundering and Counterfeiting Offenses.” Self-explanatory.

Section 11: “Applying the International Money Laundering Statute to Tax Evasion.” Using foreign accounts to evade taxes would be money laundering.

Section 12: “Conduct in Aid of Counterfeiting.” Updated counterfeiting laws would include new technology, “materials, tools, or machinery” being used.

Section 13: “Prepaid Access Devices, Stored Value Cards, Digital Currencies, and Other Similar Instruments.” This would amend Section 5316 of Title 31 in two significant ways.

First, 5316 currently states: “(2) 'financial institution' means—...(B) a commercial bank or trust company.” This would be amended to insert “or any digital exchange or tumbler of digital currency.”As Coindesk observes, “the bill clarifies that any 'issuer, redeemer or cashier' of a 'digital currency' is also covered.”

Second, the summary provided by Grassley states, “funds stored in a digital format” would be included “within the definition of monetary instruments” making them subject to “anti-money laundering reporting requirements...where the value stored is above $10,000.”

Section 14: “Administrative Subpoenas for Money Laundering Cases.” This would expand the availability of administrative subpoenas and justify an accompanying “non-disclosure order.”

Section 15: “Obtaining Foreign Bank Records from Banks with U.S. Correspondent Accounts.” The section “would strengthen this existing investigative tool.” For example, foreign banks would be subpoenaed for records related to any “civil forfeiture action” and punished for noncompliance.

Section 16: “Danger Pay Allowance.” This would provide danger pay for a wide range of law enforcement agencies.

Section 17: “Clarification of Secret Service Authority to Investigate Money Laundering.” This would expand the Secret Service's authority. For example, it would remove the requirement that a financial institution under investigation must be one that is “federally insured.”

Section 18: “Prohibition on Concealment of Ownership of Account.” This would make it an offense for a person “to knowingly conceal, falsify or misrepresent, from or to a financial institution” their identity or “a fact concerning the ownership or control of an account or assets held in an account.”

Section 19: “Prohibition on Concealment of Source of Assets in Monetary Transaction.” Currently, a person must be charged with an offense to be prosecuted for concealing, falsifying or misrepresenting involvement with a “primary money laundering concern” or a foreign individual of concern. This section would remove that requirement and allow the government to pursue the assets of the entity or person.

Section 20: “Rule of Construction.” This “would clarify that nothing in the legislation shall be construed to apply to the authorized law enforcement, protective, or intelligence activities of the U.S. or of a U.S. intelligence agency.”