5 new senators joined as co-sponsors of Warren's Digital Asset Anti-Money Laundering Act, including 3 members of the banking committee.
What Is Warren’s Digital Asset Anti-Money Laundering Act About?
US Senator Elizabeth Warren introduced the Digital Asset Anti-Money Laundering Act to address concerns regarding the alleged misuse of digital currencies in illicit activities.
According to Warren, the bill “closes loopholes and combats money laundering, ransomware attacks, sanctions evasion, drug trafficking, elder fraud, and other illicit financial activities using crypto.”
The bill aims to enforce stricter reporting requirements, including extending the responsibilities outlined in the Bank Secrecy Act (BSA). This would involve implementing Know-Your-Customer (KYC) requirements and filing reports on transactions involving unhosted wallets, among other measures, to bring the digital asset ecosystem into greater compliance and close existing loopholes.
The Digital Asset Anti-Money Laundering Act has garnered support from various organizations, including the Bank Policy Institute, Massachusetts Bankers Association, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, Massachusetts Sheriffs’ Association, AARP, National Consumer Law Center, and National Consumers League.
What Is the Update?
On December 11, 2023, Senator Warren announced that 5 new senators joined as co-sponsors of the bill, including 3 members of the banking committee. The new senators are: Senators Raphael Warnock (D-Ga.), Laphonza Butler (D-Calif.), Chris Van Hollen (D-Md.), members of the Senate Banking, Housing, and Urban Affairs Committee, and Senators John Hickenlooper (D-Colo.) and Ben Ray Luján (D-N.M.).
They join existing co-sponsors of the bill, such as Senators Roger Marshall (R-Kan.), Joe Manchin (D-W.Va.) Lindsey Graham (R-S.C.), Gary Peters (D-Mich.), Chair of the Senate Homeland Security and Governmental Affairs Committee and John Fetterman (D-Pa.).
What Are Senators Saying About the Crypto Bill?
Senator Warren emphasized that the Treasury Department needs new regulations to “crack down” on crypto’s role in funding “terrorist groups, rogue nations, drug lords, ransomware gangs, and fraudsters” and other illicit activities, saying:
“I’m glad that five new senators are joining the fight to take action, including three members of the Banking Committee – our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox.”
Senator Luján said:
“Cryptocurrencies operate with little to no oversight. This leaves consumers vulnerable, and creates new ways for bad actors to finance terrorism and drug trafficking. I’m proud to join my colleagues in this effort to protect people from the criminal activity that unregulated crypto use has enabled. This bipartisan legislation will establish safeguards to ensure crypto use is met with strong standards to keep Americans safe.”
What Does This Mean for Crypto?
Senator Warren has been notably vocal about her opposition to digital assets, calling for the crackdown cryptocurrencies and highlighting their role in illicitly funding North Korea’s missile program. She also recently raised concerns that cryptocurrencies were used in funding Hamas’ October 7 terrorist attack on Israel. In a senate hearing last week, Senator Warren questioned CEO of JP Morgan Jamie Dimon, who said that he was the government, he would “close it down.”
If the bill passed, it would:
- Extend Bank Secrecy Act (BSA) responsibilities, including know-your-customer (KYC) requirements
- Address a major gap concerning “unhosted” digital wallets
- Direct FinCEN to guide financial institutions
- Strengthen enforcement of BSA compliance by the Treasury Department
- Extend BSA rules regarding reporting of foreign bank accounts to include digital assets
- Mitigate the illicit finance risks of digital asset ATMs
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