Regulatory news: Elizabeth Warren’s crypto bill finds support in US Congress

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News regarding crypto regulation in the US, where nine members of the US Congress have expressed support for the Digital Asset Anti-Money Laundering Act, a bill recently introduced by Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham. 

Specifically, this legislation in the blockchain field has been the subject of concern among experts, who see it as one of the most direct initiatives against the privacy and freedom of cryptocurrency users. Let’s look at all the details below. 

The future of crypto regulation in the United States under discussion: the latest news 

As anticipated, recently nine members of the US Congress joined forces with Senators Elizabeth Warren (D-MA), Roger Marshall (R-KS), Joe Manchin (D-WV) and Lindsey Graham (R-SC) to support the Digital Asset Anti-Money Laundering Act

This bill is designed to close current regulatory loopholes and promote greater compliance of crypto companies with the anti-money laundering and counter-terrorist financing (AMF/CFT) regulations that already govern much of the financial system.

As we know,Senator Warren first introduced this bill in December last year. Then, in July, Senators Warren, Marshall, Manchin and Graham reintroduced it. 

We see that some experts have called this proposal a direct attack on the personal freedom and privacy of cryptocurrency users. 

In addition, last week several other US senators, including 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), announced their support for the bill.

Senator Cortez Masto, in particular, stressed the importance of preventing transnational drug cartels and other criminal organizations from financing their illegal activities through the use of cryptocurrencies, stating the following: 

“Our bipartisan bill will ensure that cryptocurrency companies follow the same rules as banks, close loopholes that criminals are taking advantage of, and provide our financial institutions with the tools they need to prosecute bad actors.”

Support for the Digital Asset Anti-Money Laundering Act in the U.S. Congress: who and why 

A diverse group of organizations, including the Bank Policy Institute, Transparency International US, Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, AARP, National Consumer Law Center (on behalf of its low-income clients), and National Consumers League, expressed support for the Digital Asset Anti-Money Laundering Act, recently introduced in Congress by Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham.

In particular, the Bank Policy Institute stressed the importance of adapting the anti-money laundering framework and the Bank Secrecy Act to digital assets and expressed its intention to work to defend the nation’s financial system against illicit financial activities.

According to a summary provided by lawmakers supporting the bill, the Digital Asset Anti-Money Laundering Act proposes to expand Bank Secrecy Act (BSA) responsibilities, including Know-Your-Customer requirements, to cover digital asset wallet providers, miners, validators and other network participants who are involved in validating, protecting or facilitating digital asset transactions.

In addition, the bill addresses a significant loophole related to non-hosted digital wallets by requiring banks and money services companies (MSBs) to verify the identities of customers and counterparties, maintain records and submit reports related to certain digital asset transactions involving non-hosted wallets or located in non-BSA-compliant jurisdictions.

The bill also seeks to extend BSA rules related to foreign bank accounts to digital assets by requiring US persons involved in digital asset transactions with a value greater than $10,000 through offshore accounts to file a foreign bank and financial account report (FBAR) with the Internal Revenue Service (IRS).

Some criticisms of Senator Warren’s crypto bill 

As we know, ever since Senator Warren proposed the crypto bill, she has also received a lot of criticism about it, particularly on the renowned social X (Twitter). 

For example, pro-bitcoin Senator Cynthia Lummis had expressed her concerns about the requirement to incorporate AML/KYC into open source software and hardware portfolios, saying that this move might not be effective.

Blockchain law professor J.W. Verret, on the other hand, argued that the bill could make transactions more traceable for criminals, raising privacy and civil rights concerns. 

Still, Neeraj Agrawal, director of communications at the Coin Center, called the bill a disaster and expressed concerns that it may not prevent future FTX-like cases.Finally, Jerry Brito, executive director of the Coin Center, expressed criticism about the Digital Asset Anti-Money Laundering Act, arguing that it is the most direct attack on the personal freedom and privacy of cryptocurrency users and developers ever.