Two U.S. senators, including Elizabeth Warren, have introduced a bipartisan bill for the regulation of cryptocurrency. The bill, titled “Digital Asset Anti-Money Laundering Act,” is “the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen,” according to crypto advocates.
Digital Asset Anti-Money Laundering Act of 2022 Launched
U.S. Senators Elizabeth Warren (D-MA) and Roger Marshall (R-KS) introduced new legislation to regulate the cryptocurrency sector Wednesday. Their bill, titled “Digital Asset Anti-Money Laundering Act of 2022,” seeks to crack down on money laundering in the crypto industry.
Senator Warren tweeted Wednesday:
By closing some loopholes and applying some common-sense rules, we can crack down on the ways rogue nations, oligarchs, and drug lords use crypto to launder billions, evade sanctions, and finance terrorism. I’ve got a bipartisan bill for that.
The legislation directs the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to designate “custodial and unhosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV searchers, and other validators with control over network protocols as money service businesses,” according to the text of the bill.
Crypto policy think tank Coin Center explained that Senator Warren’s legislation “would force anyone who helps maintain public blockchain infrastructure, either through software development or validating transactions on the network, to register as a financial institution (FI).” The crypto advocacy group added:
As FIs, they would be obligated to identify and record the personal information of every person who uses their software or sends transactions over their internet-connected computers.
Furthermore, the legislation would ban every FI from making transactions involving privacy tools, such as Tornado Cash, or privacy coins, such as zcash and monero, “irrespective of any evidence of criminality related to those transactions,” Coin Center noted.
Sen. Warren Slammed Over New Crypto Bill
Many people on Twitter slammed Senator Warren over her new crypto bill. The pro-bitcoin Senator Cynthia Lummis tweeted: “Requiring open source developers to build AML/KYC into node software and hardware wallets? That dog won’t hunt.”
Blockchain law professor J.W. Verret replied to Warren’s tweet: “This bill makes transactions easier for criminals to trace & much worse than efforts to stop civil rights by surveilling donors. Your representations about the magnitude of illicit use is contrary to Treasury’s testimony. Your push here is just fundamentally deceptive.”
Neeraj Agrawal, Coin Center’s director of communications, opined: “The new Warren bill is a disaster. It would do nothing to prevent the next FTX.” Commenting on Warren’s crypto bill, Jerry Brito, Coin Center’s executive director, tweeted:
The bipartisan Digital Asset Anti-Money Laundering Act, introduced today by Sens. Warren and Marshall, is the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen.