Senator Elizabeth Warren has been an opponent of the cryptocurrency industry, but her new bill supports crypto members of Congress.
A new anti-crypto bill will be introduced in Congress that will not do much harm to the crypto ecosystem as a whole.
On Wednesday, Democratic Senator Elizabeth Warren and Republican Senator Roger Marshall announced they would introduce legislation that would extend existing money laundering laws to include cryptocurrencies. This "Digital Asset Forgery Act" essentially extends the current Bank Secrecy Act to groups offering cryptocurrencies and cryptocurrency mining.
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In 1970, Congress passed the BSA to protect financial institutions from money laundering in the federal government. The bill would give the Treasury Department's FinCen Criminal Enforcement Network, also known as FinCen, the power to regulate cryptocurrencies, subject to essentially the same rules as major banks.
“The cryptocurrency industry has to follow common sense rules like banks, brokers and Western Union, and this rule ensures that the same standards are applied to similar financial transactions,” Warren said in a statement. “The bilateral legislation will help fill the gap in cryptocurrency laundering and strengthen enforcement to better protect U.S. national security.”
Warren & Marshall Math Know your client's proposed rules for the cryptocurrency industry. Two years ago, the Treasury proposed new rules requiring companies to log all potentially risky user activity with "hosted wallets" and wallets not affiliated with a cryptocurrency exchange or third-party. The agency said the move "increases the transparency of digital currencies and closes loopholes that can be exploited by malicious actors."
While current settlement is with the Securities and Exchange Commission and the Commodity Futures Trading Commission, the bill would require both agencies to notify FinCen that they are complying with these KYC requirements.
The bill also bans so-called "crypto mixers," programs that take cryptocurrencies from multiple users, mixing everything into a single pot before distributing it equally to each user for a small fee. Earlier this year, the Treasury Department sanctioned the Tornado Cash mixer, which North Korean-linked hackers were using to launder millions of dollars in stolen cryptocurrencies from the NFT-based game Axie Infinity.
Such a move would represent a major change for the cryptocurrency industry, which has long been an anonymous and decentralized payment method for goods or services, regardless of the number of (legitimate) transactions. However, following the complete implosion of cryptocurrency exchange FTX and now the arrest of once-famous cryptocurrency maker Sam Bankman-Fried, Congress has wondered how cryptocurrency is regulated.
Crypto advocates condemned the bill. Washington, DC-based crypto think tank Coin Center wrote that requiring all crypto entities to operate as financial institutions would be an attack on the “personal liberty and privacy of crypto users.”
Warren and Marshall fight to get the bill through Congress. During Tuesday's House Financial Services Committee hearing on FTX, several crypto advocates and members of the so-called "Blockchain 8" tried to defend the innovation, forcing the SEC to essentially force foreign crypto firms where there there are fewer opportunities. American regulations. Some of the two Democratic senators are still pushing Commodity Futures Trading Commission regulations.
Warren has already become a major naysayer to the cryptocurrency industry after clashing with cryptocurrency miners in Texas over the potency of these operations. Following the collapse of FTX last week, the bank wrote a letter to Federal Reserve Chairman Jerome Powell, concerned about its continued relationship with the cryptocurrency industry.
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