The Digital Asset Anti-Money Laundering Act, as proposed by Senator Elizabeth Warren, has gained new supporters in the form of five new senators.
Bipartisan Backing Grows
Senator Elizabeth Warren's proposed legislation to tighten the grip on crypto's role in illicit activities is making notable strides, with the Digital Asset Anti-Money Laundering Act securing additional support in the Senate.
The bill has recently garnered support from five Democratic senators, including three members of the Senate Banking Committee, who agreed to co-sponsor the legislation on December 11.
Senator Warren expressed satisfaction in a press release, stating,
"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 bipartisan bill has also received endorsements from influential organizations, such as the Bank Policy Institute, Massachusetts Bankers Association, Transparency International US, and Global Financial Integrity.
Key Provisions Of The Bill
The proposed legislation recommends expanding the Know-Your-Customer (KYC) requirements of the Bank Secrecy Act to encompass digital asset wallet providers, including non-custodial wallets, miners, validators, and other network participants engaged in digital asset transactions.
Furthermore, the bill suggests extending Bank Secrecy Act rules for foreign bank accounts to encompass digital assets. It asserts that the Financial Crimes Enforcement Network (FinCEN) would oversee the submission and updating of physical addresses for digital asset ATM owners and administrators, along with the verification of customer and counterparty identities.
Senator Warren's Legislative Track Record
Despite the momentum, some critics point to Senator Warren's track record with bills. According to data from the bill-tracking platform GovTrack, Warren has introduced 330 bills during her 11 years as a senator. However, only one relatively obscure bill has been enacted, with ten eventually folded into other bills.
According to the government information website, GovTrack, very few bills sponsored by legislators are ever enacted. While public attention often focuses on enacted bills, legislators frequently contribute to committees and propose legislative amendments, actions that may not be as visible but are crucial in the legislative process.
Reintroduced in July, Warren's Digital Asset Anti-Money Laundering Act claims to address deficiencies in the country's money laundering regulations. The bill classifies various crypto applications, including noncustodial wallets and firms, as financial institutions regulated under the Bank Secrecy Act.
Opposition To The Bill
However, opposition voices warn that the proposed legislation could stifle crypto innovation in the United States.
In the words of Galaxy Research's Head of Firmwide Research, Alex Thorn, the bill would effectively ban Bitcoin and crypto primarily because of its clause about extending KYC requirements to decentralized entities such as crypto wallet providers, miners, and validators. He claimed that such decentralized software cannot feasibly perform centralized compliance functions.
On X, Neeraj Agrawal, the communications director at Coin Center, expressed that the bill represents a direct assault on technological progress and personal privacy.
As Senator Warren's bill gains momentum, the crypto industry watches closely, assessing the potential impact on regulatory landscapes and innovation within the United States.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
