Warren introduces bipartisan bill described as biggest threat yet to crypto
Christopher Hutton
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A bipartisan pair of lawmakers have introduced legislation to counter crypto money-laundering practices following scrutiny of the crypto exchange FTX over its illicit handling of investor funds.
Sens. Elizabeth Warren (D-MA) and Roger Marshall (R-KS) introduced a bill on Wednesday that would extend anti-laundering legislation to crypto entities and impose reporting requirements on users.
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The proposed legislation is the biggest threat yet to the crypto industry, according to one group.
“Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism,” said Warren in a press statement. “The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions.”
The Digital Asset Anti-Money Laundering Act of 2022 would extend the responsibilities entailed in the Bank Secrecy Act to crypto miners, validators, and wallet providers, forcing them to incorporate practices into their internal structures that would allow the companies to counter money laundering more effectively. The bill would also require the Financial Crimes Enforcement Network to implement rules requiring banks to keep records of digital asset transactions involving an unhosted wallet.
The bill would also prohibit banks and other institutions from using digital asset mixers, which allow users to anonymize the origin of the assets.
The bill is “the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen,” tweeted Jerry Brito, director of the crypto think tank Coin Center.
The legislation arrived a day after Congress held a hearing on the collapse of the crypto exchange FTX. The exchange’s founder, Sam Bankman-Fried, was accused by the Department of Justice of money laundering, among other financial crimes.
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Warren has been a vocal critic of crypto and has been pushing for additional regulation for several months. Last week, Warren pushed for regulators to investigate Silvergate Bank’s dealings with FTX.
FTX’s new CEO John Ray III appeared before the House Financial Services Committee on Tuesday, where he spoke on the company’s poor financial practices. Ray’s appearance occurred hours after FTX founder Sam Bankman-Fried was arrested over charges filed by a New York district court, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.