According to the Bank Policy Institute, including digital assets in the Anti-Money Laundering framework is essential for safeguarding the United States financial system.
The United States banking advocacy group, the Bank Policy Institute (BPI), has backed the legislation of vocal crypto critic Senator Elizabeth Warren, calling for digital assets to fall under its own set of Anti-Money Laundering (AML) laws.
According to a July 28 Bloomberg report, Warren reintroduced the Digital Asset Anti-Money Laundering Act along with Senators Joe Manchin, Roger Marshall and Lindsey Graham.
The BPI has indicated its support for the bill, which demands more transparency in digital asset transactions to combat money laundering and terrorism financing.
The BPI highlighted the existing AML framework in the U.S. does not account for digital assets, stating:
“The existing anti-money laundering and Bank Secrecy Act framework must account for digital assets, and we look forward to engaging in this process to defend our nation’s financial system against illicit finance in all its forms.”
The seven-page bill, if passed, will require digital-asset wallet providers, miners and others that validate and secure transactions on a blockchain to keep records of their customer’s identities.
The legislation would also prohibit financial institutions from using digital asset mixers, such as Tornado Cash, which are designed to hide blockchain data.
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The Massachusetts Bankers Association, the National Consumer Law Center and the National Consumers League are among other supporters of the bill.
Tyler Winklevoss, co-founder of crypto exchange Gemini, took aim at the news in a July 28 tweet, suggesting that those opposed to Warren’s proposed bill are “doing the right thing.”
When you’ve made enemies with the bankers and Elizabeth Warren, you know you’re doing the right thing. https://t.co/w2WflrkJOu
— Tyler Winklevoss (@tyler) July 28, 2023
Warren initially introduced the bill to the U.S. Senate in December 2022, arguing that current AML laws do not cover most of the crypto industry.
On Feb. 14, during the Senate Banking Committee hearing titled, Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers, Warren declared that crypto should be held to the same regulations as banking institutions:
“Senator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker and Western Union all have to follow today.”
She stated that the crypto community wants decentralized entities running on code to be exempt from AML requirements.
“In other words, they want a giant loophole for DeFi written into the law so they can launder money whenever a drug lord or a terrorist pays them to do so,” Warren stated during the hearing.
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