Proposed Bill Penalizes U.S. Travelers For Not Declaring Bitcoin

Smuggling illegal paraphernalia into the US is one thing, but now the government also wants to know what digital currencies travelers are carrying as well.

A new bill proposes that additional border protection protocols be implemented to better prevent visitors from transporting undocumented assets into the country.

U.S. Bill S.1241 was introduced in the Senate in May by Senator Chuck Grassley (R-IA) and is cosponsored by Sen. Dianne Feinstein (D-CA), Sen. John Cornyn (R-TX), and Sen. Sheldon Whitehouse (D-RI). The bill has been named the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017 and will potentially produce a "border protection strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States."

Though on the surface the bill sounds like another anti-money laundering law, it is one of the first that would explicitly include language on digital currencies. Here are a few key points ReviewBitcoin.com has gathered from a closer look at the bill:

https://www.congress.gov/bill/115th-congress/senate-bill/1241/text

• Current federal law already requires travelers carrying more than $10,000 in cash to report the funds to U.S. Customs and Border Protection, however, the new Act expands the definition of “monetary instruments”. Visitors would also have to report “prepaid access devices, stored value cards, digital currencies, and other similar instruments.”
• U.S. Customs and Border Protection along with the Secretary of Homeland Security would be required to develop systems that identify and prevent undeclared cryptocurrencies and other financial instruments from being brought into the country.
• Blank checks must also be reported if the checking account attached holds more than $10,000 in cash. If you unknowingly have a blank check in your luggage yet are caught by authorities, you could face up to 10 years in prison.

If you have bank accounts or other tangible goods that are valued over $10,000 but stored outside of the United States, you follow a different set of travel requirements. Users of bitcoin, ethereum, and other digital currencies are technically always holding their digital currency, whether by paper, hardware, or mobile wallet. This means that travelers would have to file a report with customs every time they return to the country.

U.S. Bill S.1241 could also influence the expansion of the Foreign Account Tax Compliance Act. Legislators could amend the act to also outline regulation for foreign digital currency exchanges. Another probable action could be a worldwide blockchain monitoring system to keep an eye on all ledger activities. Even though the controversial bill is still in its early stages, there is no telling what measures it could lead government authorities and agencies to take. The core of bitcoin and other cryptocurrencies is that they are decentralized. Any law that goes against this principle, whether approved by Congress or merely proposed, is guaranteed to garner opposition from the millions of digital currency users around the globe.