• Wed. May 29th, 2024

Olta Andoni of Enclave Markets Talks to us about Money Laundering -Digital Assets

Enclave Markets


The collapse of the cryptocurrency markets and the following contagion has given birth to several responses, including the United States Federal Government.

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Congress, in particular, has responded with a wide range of measures, including the bipartisan Digital Asset Anti-Money Laundering Act of 2022.

While the act is seen as anti-crypto, it enforces compliance, which has been severely lacking until now.

The act enables the Treasury’s Financial Crimes Enforcement Network (FinCEN) to act against digital asset transfers within United States jurisdiction over $10,000.


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The act further limits the deployment of anonymous and privacy technologies, a core part of the ideologies that pervade several cryptocurrency projects.

The act doesn’t cover the jurisdictional areas of influence between the Commodity Futures Trading Commission (CFTC) and the US SEC.

Many conflicts of interest have slowed compliance and investigative activities.

Many issues need to be sorted out with the act in its current form, but crypto regulation is coming, and this is just the beginning.

We reached out to Olta Andoni, General Counsel at Enclave Markets, about the act and more.

Here’s the inside scoop.


Enclave Markets

Olta Andoni, General Counsel at Enclave Markets

E-Crypto News:

Please tell us about the Digital Asset Anti-Money Laundering Act?

The “Digital Asset Anti-Money Laundering Act of 2022”  was introduced by U.S. Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan) to crack down on money laundering and financing of terrorists.

The bill was introduced after the FTX fallout and addresses the concerns that regulators and lawmakers have consistently expressed regarding cryptocurrencies being used for money laundering and terrorist financing and that decentralized public blockchains serve no inherent purpose. This is a narrative that keeps surrounding the crypto industry for a while now and that needs to be changed mostly via education.

E-Crypto News:

What are the implications of the act?

This is a very narrow bill and I think it has a very low chance to move forward, but nevertheless a very dangerous bill for our industry. The bill extends the BSA’s KYC requirements to digital asset wallet providers, miners, validators, and other network participants by “classifying custodial and un-hosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV searchers, and other validators with control over network protocols as money service businesses.”

If this bill is to move forward, it should equalize the treatment and not punish blockchain participants while favoring others who facilitate internet transactions in the same way Section 230 of the Communications Decent Act (CDA) recognized the role and damaging nature that broad regulations could have on ISP providers in the early 1990s.

The bill will have a chilling effect – especially on innovation and on blockchain technology – by impeding software developers to continue interacting freely and work toward the building of more use cases implementing the technology. Regulation is needed for our industry, but I do believe in sensible regulation and regulation of intermediaries such as centralized trading venues and custodians.

Related: The Challenges of Regulating the Cryptocurrency Market

E-Crypto News:

What are the drawbacks of the act to crypto consumers?

The bill does nothing to protect consumers. If enacted the bill will be very harmful to all consumers because it infringes on an individual’s privacy while advancing government and private sector surveillance. Furthermore, the bill would not provide much on preventing bad behavior and bad actors from continuing to commit fraud while leveraging crypto assets.

E-Crypto News:

How did the FTX situation lead to the Act?

I think the FTX fallout definitely fueled a lot more concerns and actions by the regulators with this bill proposal being one of the many other upcoming bill proposals. However, the bill does not address the root causes of the FTX fallout and/or other fallouts such as Terra/Luna, 3AC, etc.

The FTX fallout highlights once more that fraud per se can happen and can be perpetrated everywhere in both traditional and decentralized finance. FTX was a pure failure of government controls and human error.

Related:Op-Ed: Sam Bankman-Fried Offers Lessons on How Not to Be a Crypto CEO

E-Crypto News:

What are the benefits of a fully encrypted exchange (FEX)?

A Fully Encrypted Exchange (FEX) is an exchange that is governed by code specifically written to prevent front-running, misuse of user funds, stop-loss hunting and other malicious behavior. It is built entirely within a Secure Enclave that prevents any single party — including the exchange operator — from controlling customer funds or tampering with the codebase. Operating a FEX ensures that (1) integrity exists at all times via remote attestation, (2) that no individual actors (including any trading firms) have preferential access to the order flow, and (3) that no single point of failure exists in maintaining the integrity of the platform.

E-Crypto News:

What services do Enclave Markets offer crypto clients?

Enclave Markets combines the worlds of traditional and decentralized finance through its FEX. Enclave’s first offering, Enclave Cross, is a fully confidential OTC trading platform that allows pre-approved users to trade securely on a tamper-proof and private marketplace with minimal market impact.

Currently, executing large orders on existing trading platforms can lead to material market impact due to these large trades being viewed as market momentum signals. When other market participants act on these signals, they can expose proprietary trading strategies and amplify price movements. Even if no market participant acts on the trade, such large orders move the market and result in poor execution and adverse price action.

Enclave Cross solves these issues by creating an OTC marketplace where approved institutional crypto traders can make block trades off-chain in a fully private and secure environment.

E-Crypto News:

How deep do you think the current contagion in the cryptocurrency markets stretches?

We do not know the full impact of the FTX fallout. I expect more dominoes to fall in the spring/summer of 2023.

E-Crypto News:

How bumpy is the road to crypto adoption currently?

I don’t think the road to crypto adoption is a bumpy road per se. There are many strong projects that continue building in the space and working toward crypto adoption. But we will need time and energy to rebuild the lost trust, especially among our regulators.

Related: Governments and Cryptocurrencies- Regulating Cryptocurrencies?


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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.