Senate Crypto Bill Sparks Surveillance Concerns in Digital Asset Sector

Galaxy Digital has issued a stark warning about the US Senate's proposed crypto market structure bill, suggesting it represents the most significant expansion of Treasury surveillance powers since the Patriot Act. The legislation would grant authorities unprecedented control over digital asset transactions, including the ability to freeze funds without judicial oversight.

The bill introduces crypto-specific "special measures" that could restrict transactions with foreign entities deemed money-laundering risks. It also mandates strict Anti-Money Laundering compliance for platforms and extends Bank Secrecy Act requirements to certain DeFi protocols—a MOVE that could fundamentally alter the decentralized finance landscape.

Market participants are particularly concerned about provisions allowing temporary transaction holds without court orders. These measures, while aimed at combating illicit finance, may create operational challenges for exchanges and wallet providers navigating the new compliance landscape.