U.S. Senator Elizabeth Warren (D-MA) takes part in an International Brotherhood of Electrical Workers (IBEW) phone bank in Boston, Massachusetts, U.S. December 2, 2022

Senator Elizabeth Warren’s Ambitious Crypto Bill Gains Ground Among US Legislators

Capitol Hill, Senator Elizabeth Warren’s Crypto Bill has gained significant support among her fellow lawmakers. The proposed legislation, which aims to bring comprehensive oversight to the rapidly evolving world of cryptocurrencies, has sparked a contentious debate within the crypto community and among legislators. However, recent developments suggest that Warren’s bill may be on the path to becoming law.

Nine U.S. legislators have endorsed the reintroduced Digital Asset Anti-Money Laundering Act, which Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham recently brought back to Congress. Analysts caution that this cryptocurrency legislation represents a significant and targeted effort to curtail the privacy and individual liberties of those engaged in digital asset transactions.

Growing Backing for the Digital Asset Anti-Money Laundering Act

Nine U.S. legislators have aligned themselves with Senators Elizabeth Warren (D-MA), Roger Marshall (R-KS), Joe Manchin (D-WV), and Lindsey Graham (R-SC) in endorsing the Digital Asset Anti-Money Laundering Act. The primary objective of this legislation is to address existing regulatory gaps and enhance the compliance of cryptocurrency firms with anti-money laundering and counter-terrorism financing (AML/CFT) protocols that govern a substantial portion of the financial system, as outlined by these lawmakers.

Senator Warren originally introduced this bill in December of the previous year, and in July, Senators Warren, Marshall, Manchin, and Graham reintroduced it. Industry experts have characterized this legislation as one of the most direct challenges to the personal liberties and privacy of cryptocurrency users. In a noteworthy development, last week, U.S. Senators Catherine Cortez Masto (D-NV), Gary Peters (D-MI), Dick Durbin (D-IL), Tina Smith (D-MN), Angus King (I-ME), Jeanne Shaheen (D-NH), Bob Casey (D-PA), Richard Blumenthal (D-CN), and Michael Bennet (D-CO) also conveyed their support for the bill.

Senator Cortez Masto emphasized the importance of preventing transnational drug cartels and other criminal entities from financing their illicit activities through cryptocurrencies, stating: Our bipartisan bill will make sure cryptocurrency companies follow the same rules as banks, close loopholes that criminals are taking advantage of, and give our financial institutions the necessary tools to go after bad actors.

Endorsements and Objectives: A Closer Look

This legislation has garnered support from a diverse range of organizations, including the Bank Policy Institute, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, AARP, National Consumer Law Center (representing its low-income clients), and the National Consumers League.

The Bank Policy Institute expressed its stance, stating, “The existing anti-money laundering and Bank Secrecy Act framework must adapt to encompass digital assets, and we eagerly anticipate participating in this process to safeguard our nation’s financial system from illicit financial activities in all their manifestations.”

As outlined in a summary provided by the endorsing lawmakers, the Digital Asset Anti-Money Laundering Act would: Extend Bank Secrecy Act (BSA) responsibilities, including Know-Your-Customer requirements, to digital asset wallet providers, miners, validators, and other network participants that may act to validate, secure, or facilitate digital asset transactions.

Key Provisions of the Digital Asset Anti-Money Laundering Act

It would also “Address a significant loophole concerning ‘unhosted’ digital wallets,” compelling banks and money service businesses (MSBs) to “authenticate the identities of both customers and transaction counterparts, maintain comprehensive transaction records, and submit reports for specific digital asset transactions involving unhosted wallets or wallets hosted in non-BSA compliant jurisdictions,” as elaborated by the legislators.

Furthermore, the bill aims to expand the scope of Bank Secrecy Act (BSA) regulations related to overseas bank accounts to encompass digital assets. This expansion would require individuals in the United States who partake in transactions exceeding a value of $10,000 in digital assets through one or more offshore accounts to submit a Report of Foreign Bank and Financial Accounts (FBAR) to the Internal Revenue Service (IRS).

The growing support for the Digital Asset Anti-Money Laundering Act among legislators and various organizations reflects the increasing recognition of the need to regulate the cryptocurrency space. While concerns about individual privacy persist, the bill aims to address regulatory gaps and promote transparency in the digital asset market. If Elizabeth Warren’s Crypto Bill passed, it could mark a significant step towards balancing innovation and security within the cryptocurrency industry, with potential implications for the global financial landscape.

Also Read: FTX Reopens the Claims Portal After Recuperating from Cyber Attack.