Elizabeth Warren’s Bill Won’t Stop Money Laundering, but It Could Ban Crypto

Updated: 19 May 2023

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Senator Elizabeth Warren’s stand against crypto seems to grow clearer by the day as she continues to rally the U.S. Congress to adopt the Digital Asset Anti-Money Laundering Act. On paper, this law appears to be the magic bullet that will wipe out all money laundering attempts in America, but that is far from factual.

Why is the Digital Asset Anti-Money Laundering Act a Threat to Crypto?

Cryptocurrencies have been around for slightly over a decade. This makes them a novel technology subject to suspicion, scrutiny, and maybe even blatant outrage. It is true that digital assets have their flaws, including high volatility and the risk of online security threats. However, they are not as threatening as the Digital Asset Anti-Money Laundering Act makes them appear.

This Act portrays cryptocurrencies as the primary conduit for money laundering across the U.S. It says in part that “The Treasury Department, Department of Justice, and other national security experts have warned that digital assets are increasingly being used for money laundering, theft and fraud schemes, trafficking,terrorist financing, and other crimes.”

For this reason, the Act proposes multiple measures that, if put in place, will undermine the decentralized nature of cryptocurrencies.

The most alarming clause in this law is one that intends to make all digital asset wallet stakeholders subject to the Extend Bank Secrecy Act (BSA). The group targeted includes providers, miners, validators, and other network participants. This essentially means the Federal Reserve or other government agencies mandated by this Act can exercise authority over crypto-related organizations by turning them into financial institutions.

Such a move would automatically cripple all that crypto stands for. It will subject digital assets to government control, interfering with crypto’s core purpose of giving financial control back to the people.

Band-Aid on a Gunshot Wound – Elizabeth Warren’s Bill

Cryptocurrencies are sometimes used for the wrong reasons, but Senator Warren’s bill proposes the death of crypto and not money laundering.

Money laundering has been entrenched in American history before the word cryptocurrency was even envisioned. Above that, it will continue to ravage the economy even if crypto institutions are weakened.

As it turns out, the Extend Bank Secrecy Act (BSA), proposed in the Digital Asset Anti-Money Laundering Act, took effect in 1970 to curb the same problem, money laundering. Until 2012, when the first cryptocurrency launched, this Act had not managed to do away with this financial crime. However, it is now a strategic trojan horse used to launch an attack against the crypto world.

Unfortunately, many Americans are hoodwinked into believing that the Act proposed by the Massachusetts left-wing senator will end money laundering. This gospel continues to spread far and wide. Currently, several left and even right-wing senators, like Senator Roger Marshall, rally behind the Act.

Which Way Forward for Crypto in the U.S.?

Crypto’s future in the U.S. hangs by a thread. Although the digital asset space needs regulation, the adoption of the Warren Act will be the death of the industry.

Legislation on cryptocurrencies should work towards making the space safer while enabling it to thrive. What the Digital Asset Anti-Money Laundering Act proposes is the exact opposite. This Act will single-handedly smother the crypto world and take away the financial liberation it offers.

So, as the government tries to find ways to seal the loopholes of the digital asset economy, it should remain considerate that it is a source of livelihood for many and a potential avenue for revenue if well regulated.