U.S. Senator Warren Introduces Bipartisan Bill to Address Crypto Money Laundering

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The Digital Asset Anti-Money Laundering Act from Elizabeth Warren addresses loopholes within the crypto space being exploited for money laundering.

Rogue nations, oligarchs and drug lords are using crypto to launder billions, evade sanctions and finance terrorism. My bipartisan bill puts common-sense rules in place to help close crypto money laundering loopholes and protect our national security.https://t.co/n69LZfX8zX

— Elizabeth Warren (@SenWarren) December 14, 2022

United States senator Elizabeth Ann Warren is seeking to address growing concerns about the emergence of crypto-related crimes. She recently introduced a bipartisan bill along with Kansas junior senator Roger Marshall. The bill, dubbed The Digital Asset Anti-Money Laundering Act, is meant to tackle money laundering practices within the cryptocurrency scene.

Information from a CNN report reveals that the bipartisan team-up between Warren and Marshall will introduce provisions that would handle loopholes native to the crypto industry, which make it possible for bad actors to exploit the space for money laundering. The development follows the collapse of Sam Bankman-Fried’s FTX, which the DoJ claims was used for money laundering crimes, amongst other financial offenses.

According to the report from CNN, chances of the bill making it through the current Congress are slim due to time constraints, as the recent 117th Congress meeting will end on January 3 next year. Consequently, Warren and Marshall might have to bring it up once more in the next session of the U.S. Congress for proper consideration.

“I’ve been ringing the alarm bell in the Senate on the dangers of these digital asset loopholes, and I’m working in a bipartisan manner to pass common-sense crypto legislation to safeguard U.S. national security better,” Warren remarked in an exclusive CNN interview.

Warren addressed the recent FTX implosion, noting that the current charges brought on Sam Bankman-Fried and the developments following the debacle within the political scene are a testament to the “serious [political] scrutiny” the digital asset space is under.

The bill comes amidst a growing rate of crypto-related money laundering crimes due to the level of anonymity blockchain technology introduces, which has not been adequately regulated due to its nascency. Following the sanction of crypto mixer Tornado Cash, the Treasury Department, in August, highlighted the increasing rate of crypto money laundering crimes.

Provisions of the Bill

The Digital Asset Anti-Money Laundering Act will penetrate the crypto scene by introducing within the space provisions native to traditional finance entities and banks regarding money laundering. These provisions will subject crypto entities to the measure of scrutiny that traditional banks are under regarding money laundering.

Once the bill is passed, the Financial Crimes Enforcement Network (FinCEN) bureau of the U.S. Treasury Department will be given a directive to regard crypto miners, wallet providers, and other concerned firms as money service entities. This move will automatically subject crypto entities to provisions of the Bank Secrecy Act of 1970, which include Know-Your-Customer (KYC) dictates.

The bill will direct American financial regulators to enforce restrictions regarding crypto wallets that would address specific openings utilized in circumventing anti-money laundering measures. This move involves a directive to FinCEN to implement a guideline introduced in 2020 that would force banks and non-bank financial entities to verify customer IDs, maintain proper records, and report data associated with unhosted accounts.

Other provisions of the bill include:

• It requires U.S. citizens carrying out cross-border crypto transactions worth $10,000 or more to file reports with the Internal Revenue Service (IRS).
• It restricts banks and other regulated financial entities from operating or interacting with technologies that bolster anonymity, such as crypto mixers.
• Financial regulators must ensure that provisions of the Bank Secrecy Act are complied with through periodic compliance check exercises for financial entities.
• It ensures that crypto ATM operators report the physical location of their kiosks where necessary.

“Following the September 11, 2001, terrorist attacks, our government enacted meaningful reforms that helped the banks cut off bad actors’ from America’s financial system,” Marshall remarked in an official statement. He noted that these measures ought to be employed within the crypto space, as they would efficiently combat crypto-related money laundering while concurrently ensuring that the average consumer has adequate access to crypto services.

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