Senator Elizabeth Warren, a strong opponent of cryptocurrencies, has introduced legislation that would subject digital assets to specific Anti-Money Laundering (AML) regulations. The Bank Policy Institute (BPI), a lobbying group for American banks, has welcomed this proposal.The Digital Asset Anti-Money Laundering Act was reintroduced on July 28 by Warren, Joe Manchin, Roger Marshall, and Lindsey Graham, according to a Bloomberg article.The law, which calls for greater openness in digital asset transactions to thwart money laundering and terrorism financing, has the support of the BPI.The BPI stated that the U.S.’s current AML framework does not take into consideration digital assets.
“The existing anti-money laundering and Bank Secrecy Act framework must account for digital assets, and we look forward to engaging in this process to defend our nation’s financial system against illicit finance in all its forms.”
If the seven-page measure is approved, it will be necessary for miners, suppliers of digital asset wallets, and other parties involved in validating and securing blockchain transactions to maintain records of the identities of their clients.Financial institutions would also be prohibited from employing digital asset mixers, like Tornado Cash, that are intended to conceal blockchain data.
Among those who favor the legislation are the National Consumers League, the Massachusetts Bankers Association, and the National Consumer Law Center.In response to the announcement, Tyler Winklevoss, co-founder of the cryptocurrency exchange Gemini, tweeted on July 28 that individuals opposed to Warren’s planned legislation are “doing the right thing.”
Warren first proposed the legislation to the U.S. Senate in December 2022, claiming that the majority of the crypto business is not covered by the current AML regulations.Warren stated that cryptocurrency should be subject to the same laws as banking institutions on February 14 during a Senate Banking Committee hearing titled, “Crypto Crash. Why the FTX Bubble Burst and the Harm to Consumers.”
“Senator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker and Western Union all have to follow today.”
The crypto community, according to her, wants decentralized software-based organizations to be excluded from AML regulations.
“In other words, they want a giant loophole for DeFi written into the law so they can launder money whenever a drug lord or a terrorist pays them to do so,” Warren stated during the hearing.