United States Senator Elizabeth Warren’s (D-Mass.) anti-cryptocurrency bill has gathered momentum with the additional support of five new senators.
Tagged the ‘Digital Asset Anti-Money Laundering Act’, the bill seeks to put a cap on crypto’s involvement in illicit activities in the country.
The expansion of the Senate’s support was revealed in a press release from Warren’s official website dated 11 December 2023. It listed Senators Raphael Warnock (D-Ga.), Laphonza Butler (D-Calif.), Chris Van Hollen (D-Md.), John Hickenlooper (D-Colo.), and Ben Ray Luján (D-N.M.) as the new cohort joining the existing co-sponsors.
In an official comment, Senator Warren said: “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.”
The Digital Asset Anti-Money Laundering Act is aimed at addressing the illicit finance risks posed by cryptocurrencies by closing loopholes and ensuring compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) frameworks.
Senator Warren addressed the need for new laws to crack down on crypto’s use in enabling “terrorist groups, rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions in stolen funds, evade sanctions, fund illegal weapons programs, and profit from devastating cyberattacks”.
The bill has been endorsed by various organisations like Bank Policy Institute, Massachusetts Bankers Association, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, National Consumers League and so on.
Recently, Senator Warren had also introduced the CEO of banking giant JPMorgan in front of a panel of lawmakers at a Senate hearing.
Jamie Dimon was questioned on why crypto is an attractive tool for malicious actors like terrorist groups and drug traffickers. To this, he noted always being “deeply opposed” to the likes of Bitcoin and would, therefore, want to cease its operation.
“If I was the government, I’d close it down,” added Dimon, saying that crypto can easily bypass government controls.
Key provisions of anti-crypto bill
The anti-crypto bill that is being pushed by these senators seeks to bring digital asset wallet providers, miners, validators, and other network participants under the purview of the Bank Secrecy Act (BSA) requirements, including know-your-customer (KYC) rules.
It addresses gaps related to “unhosted” digital wallets which allow individuals to bypass AML and sanctions checks. This would be done by directing the Financial Crimes Enforcement Network (FinCEN) to finalise and implement its December 2020 proposed rule which would require banks and money service businesses to verify customer and counterparty identities, keep records and so on.
FinCEN will also be given the task of issuing guidance to financial institutions on mitigating the risks of handling, using, or transacting with digital assets that have been anonymised using digital asset mixers and other anonymity-enhancing technologies.
The enforcement of BSA compliance will be strengthened, involving the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to establish AML/CFT compliance examination and review processes for the entities they regulate.
A United States person engaging in a transaction with a value greater than $10,000 in digital assets through one or more offshore accounts will be required to file a Report of Foreign Bank and Financial Accounts (FBAR) with the Internal Revenue Service (IRS).
FinCEN will also try to mitigate the illicit finance risks of digital asset ATM owners and administrators by asking them to regularly submit and update the physical addresses of the kiosks they own or operate and verify customer and counterparty identity.
