A renewed bipartisan effort is underway in the United States Senate, led by Senators Elizabeth Warren (D-Mass) and Roger Marshall (R-Kan.), and supported by Senators Joe Manchin (D-W.Va.) and Lindsey Graham (R-S.C.), to combat criminal activity facilitated by cryptocurrencies.
The initiative, which has been dubbed the Digital Asset Anti-Money Laundering Act, seeks to fortify national security by enforcing stricter regulation of digital assets, aligning the crypto ecosystem with the existing frameworks that oversee the broader financial system.
The proposal for stricter cryptocurrency regulation comes amid growing concerns about the use of digital assets for illegal activities.
The lawmakers are worried about how digital assets are being misused. Cryptocurrencies have been linked to all sorts of illegal activities, from funding weapons programs to helping criminals evade the law. They aim to eliminate these activities by introducing measures that would extend the Bank Secrecy Act (BSA) responsibilities, including the Know-Your-Customer requirements, to various digital asset network participants, such as wallet providers, miners, and validators.
Furthermore, the bill plans to strengthen the enforcement of BSA compliance and mitigate the illicit finance risks of digital asset ATMs. According to reports, in 2022, illicit digital asset transactions peaked at an all-time high of $20 billion.
In an unexpected twist on the political stage, the bill has attracted applause from key players in the banking world. The Bank Policy Institute and the Massachusetts Bankers Association are stepping onto the same side of the arena as Senator Warren, a known critic of Wall Street and the crypto industry. It appears that on this issue, these former adversaries have found common ground -- a mutual desire to steer cryptocurrencies into safer harbors.
Gamza Khanzadaev
