Elizabeth Warren Bill To Crack Down On Crypto's Illicit Use Gains Nine More Backers

Elizabeth Warren Bill To Crack Down On Crypto’s Illicit Use Gains Nine More Backers

Updated: 18 September 2023

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Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering bill, designed to crack down on the illicit use of cryptocurrencies, gained nine more backers.

“Crypto is enabling 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,” Warren said in a release. “Our expanding coalition shows that Congress is ready to take action – 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.”

Senators Gary Peters (D-Mich.), Chair of the Senate Homeland Security and Governmental Affairs Committee, Dick Durbin (D-Ill.), Chair of the Senate Judiciary Committee, Tina Smith (D-Minn.), Angus King (I-Maine), Jeanne Shaheen (D-N.H.), Bob Casey (D-Pa.), Richard Blumenthal (D-Conn.), Michael Bennet (D-Colo.) and Catherine Cortez Masto (D-Nev.) joined the bipartisan coalition supporting the bill.

The bill has also gained support from influential organizations including Transparency International U.S., Global Financial Integrity, the National District Attorneys Association, Major County Sheriffs of America, the National Consumer Law Center, and the National Consumers League, according to the statement.

Introduced for the first time in December and resubmitted last month, the bill, also supported by Senators Joe Manchin, Roger Marshall, and Lindsey Graham, seeks to address regulatory gaps and ensure that the digital asset industry adheres to regulations more effectively.

Warren’s Proposed Legislation

The proposed law seeks to impose regulatory obligations on individuals involved in cryptocurrencies, which it defines as wallet providers, miners, and validators. If the law is approved, these individuals will be required to submit reports for transactions surpassing $10,000 and report any actions that might indicate money laundering or tax avoidance, the press release highlighted.

The legislation will also extend the regulatory framework that applies to traditional financial institutions to cryptocurrency firms, subjecting them to the Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements outlined in the Bank Secrecy Act (BSA). This includes digital asset wallet providers, miners, and validators.

One of Warren’s major concerns relates to what she calls the “crypto tax gap.” She estimates this gap to be around $50 billion and warns that if tax policies are not updated promptly, the Internal Revenue Service (IRS) and the U.S. Treasury could potentially lose approximately $1.5 billion in tax revenue for the fiscal year 2024, the statement read.

Building “Anti-crypto Army”

Senator Warren has vocally criticized cryptocurrencies. In March she posted a tweet from her campaign account, indicating her intention to build an “anti-crypto army.”

I’m in this fight to put our government on the side of working families. Join our re-election campaign today: https://t.co/KuZwvrwkqT pic.twitter.com/fCUcqE9PZM

— Elizabeth Warren (@ewarren) March 29, 2023

The Massachusetts Democrat described the legislation as a measure designed to eliminate gaps in anti-money laundering regulations, thereby preventing drug suppliers and criminal organizations from exploiting cryptocurrencies for their illegal activities, according to a July statement.