Progress is being made in the U.S. Senate on regulations concerning the cryptocurrency industry, spearheaded by U.S. Senator Elizabeth Warren with her Digital Asset Anti-Money Laundering Act. This legislation, designed to combat perceived risks associated with cryptocurrencies, has successfully garnered bipartisan support from nine other senators according to a statement from Senator Warren’s office.
The coalition rallying behind Senator Warren’s proposal is a mixture of Democrats and their independent colleagues. From the Democratic side, senators offering their support include Gary Peters, Dick Durbin, Tina Smith, Jeanne Shaheen, Bob Casey, Richard Blumenthal, Michael Bennet, and Catherine Cortez Masto. Independent Senator Angus King has also committed his backing.
Senator Warren’s ambition for this legislation is to crack down on the illicit usage of cryptocurrencies. Citing concerns over how digital assets are leveraged by rogue nations, drug dealers, ransomware gangs, and fraudsters, she argues that stricter regulations are imperative on cryptos in order to cut off their misuse. She asserts, “Crypto is enabling billions in stolen funds to be laundered, sanctions to be evaded, illegal arms programs to be funded, and cyberattacks to be profited from.”
The Digital Asset Anti-Money Laundering Act strives to close regulatory loopholes by extending the same financial compliance stipulations from traditional financial institutions to cryptocurrency firms, with a special focus on Know Your Customer (KYC) and Anti-Money Laundering (AML) practices, as currently outlined in the Bank Secrecy Act (BSA). This bill, first introduced in December of last year and resubmitted again in August 2023, specifically targets digital asset wallet providers, miners, and validators.
Senator Warren’s proposed legislation demands that banks and money service businesses uphold their responsibility to verify customer and counterparty identities, keep records, and file reports on specific digital asset transactions involving unhosted wallets. Apart from these requirements, it also proposes that U.S. residents with over $10,000 in cryptocurrency in one or more external accounts submit reports.
Moreover, this legislation is also designed to combat the alarming trend of cryptocurrencies supporting local and international criminal operations. According to Senator Lindsey Graham, “Our legislation will create transparency and provide oversight in an industry that, in many cases, facilitates criminal activity. When it comes to transparency and legality, many of the same rules that apply to the dollar should now apply to crypto.”
The bill has also been endorsed by Transparency International U.S., Global Financial Integrity, the National District Attorneys Association, the Major County Sheriffs of America, the National Consumer Law Center, and the National Consumers League.
In conclusion, the expansion of this coalition signifies the U.S. Congress’s readiness to confront the digital currency phenomenon head-on. This bipartisan commitment acknowledges the risks posed by cryptocurrencies and reflects a call-to-action to bring greater accountability to the realm of digital finance.