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A bipartisan amendment to embattled legislation in the Senate would subject U.S. stablecoin issuers to additional anti-money laundering requirements and grant the Treasury Department new latitude to impose larger penalties in response to multiple, egregious violations.

Sens. Bill Hagerty (R-TN) and Kirsten Gillibrand (D-NY) introduced their amendment to the Guiding and Establishing National Innovation for U.S. Stablecoins Act, also known as the GENIUS Act, on Thursday, bringing the total number of proposed revisions to 82 as of Friday afternoon, at least seven of which would impact AML compliance.

The current text of the GENIUS Act would place permitted stablecoin issuers under AML requirements; require them to maintain effective programs for complying with sanctions; and direct the Treasury Department to submit annual reports to Congress on legislative and regulatory proposals for detecting money laundering through digital assets.

Hagerty and Gillibrand’s amendment would set new standards for calculating civil monetary penalties, giving the Treasury Department new leverage to punish multiple instances of non-compliance individually if they resulted from “gross negligence,” or “a reckless disregard” or “pattern of indifference to” attempts to launder money, finance terrorists or evade sanctions.

The GENIUS Act already places some conditions on foreign issuers of U.S. stablecoins, but Hagerty and Gillibrand’s amendment to the bill would explicitly ban any such platform based in, or regulated by, a jurisdiction that federal officials have targeted with sanctions or designated as a “primary money laundering concern” from doing so.

Debate on the bill officially closed on May 20 but lawmakers continue to hammer out changes behind the scenes, aides to Sens. Dick Durbin (D-IL) and Lisa Blunt Rochester (D-DE), both of whom have submitted AML-focused amendments, told ACAMS moneylaundering.com.

Other provisions of the Hagerty-Gillibrand amendment would further require Treasury to determine whether foreign governments have “adequate” AML, combating-the-financing-of-terrorism and sanctions-compliance standards in place before entering into any reciprocal deal or other bilateral agreement with them on regulating stablecoins.

A separate amendment pitched by Sen. Jeff Merkley (D-OR) on May 22 would bar the president, vice president, cabinet members, special government employees, federal lawmakers and their families from issuing or profiting from the issuance of stablecoins.

Republicans hold 53 seats in the Senate, so require the support of at least seven Democrats or independents to pass legislation.

At least one Republican, Sen. Josh Hawley of Missouri, has criticized the GENIUS Act as a “huge giveaway to Big Tech.”

A handful of Democrats helped advance the bill out of the Senate Banking Committee on March 13 prior to reversing course last month.

Contact Charlie Passut at cpassut@acams.org