Support Grows for Elizabeth Warren’s Crypto Legislation to Combat Money Laundering

In a remarkable display of unity against illicit activities in the cryptocurrency realm, nine U.S. Senators have rallied behind Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act. This bipartisan coalition boasts influential figures, including Democratic Party Senators Gary Peters, Dick Durbin, Tina Smith, Jeanne Shaheen, Bob Casey, Richard Blumenthal, Michael Bennet, Catherine Cortez Masto, and independent Senator Angus King.

Warren, a prominent critic of cryptocurrencies, expressed her enthusiasm for the surging support, declaring, “Our expanding coalition sends a clear message that Congress is poised to take decisive action. Our bipartisan proposal represents the most stringent measure on the table to crack down on the illicit use of cryptocurrencies while equipping regulators with enhanced tools.”

Notably, Gary Peters chairs the Senate Homeland Security and Governmental Affairs Committee, while Dick Durbin holds the influential position of chair of the Senate Judiciary Committee. This high-profile backing underscores the seriousness with which these senators view the issue of cryptocurrency-related money laundering and illicit activities.

The Digital Asset Anti-Money Laundering Act, reintroduced by Warren in July 2023, takes aim at several pivotal aspects of the cryptocurrency industry. It seeks to regulate noncustodial digital wallets, broaden the responsibilities outlined in the Bank Secrecy Act, and establish rigorous Anti-Money Laundering/Combating the Financing of Terrorism compliance examinations. These measures are strategically designed to counter the escalating threat of digital money misuse.

Warren’s concerns transcend security as she contends that there exists a substantial “$50 billion crypto tax gap.” She cautions that without a timely update to tax policies, the Internal Revenue Service and U.S. Treasury could forego approximately $1.5 billion in tax revenue for the 2024 financial year.

This legislative endeavor to combat illicit cryptocurrency activities has garnered widespread support from diverse organizations, including Transparency International U.S., Global Financial Integrity, the National District Attorneys Association, the Major County Sheriffs of America, the National Consumer Law Center, and the National Consumers League.

However, despite the burgeoning coalition, the trajectory of this bipartisan bill remains uncertain given the divided nature of Congress, especially as the nation approaches a contentious election year. While the House of Representatives has made headway on cryptocurrency-related bills, none of them match the scope and ambition of Elizabeth Warren’s proposal.

Crypto lobbyists have fiercely opposed the legislation, arguing that it could stifle digital asset innovation in the United States, thereby jeopardizing market security. Surprisingly, Warren’s initiative has also garnered support from Wall Street bankers, including industry lobbyists like the Bank Policy Institute.

While the fate of the Digital Asset Anti-Money Laundering Act remains uncertain in the short term, it is evident that the issue of money laundering in the cryptocurrency sphere is gaining prominence within the halls of Congress. Even if this bill does not make significant strides, it’s noteworthy that some of Warren’s money-laundering concerns have been addressed in an amendment to the 2024 National Defense Authorization Act (NDAA).