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Elizabeth Warren Crypto Act Gains Support from US Senators

The Digital Asset Anti-Money Laundering Act of Elizabeth Warren gains momentum with nine U.S. senators endorsing stricter cryptocurrency regulations.

In a significant move, the Digital Asset Anti-Money Laundering Act of Elizabeth Warren recently gained the backing of nine additional U.S. senators. This growth in support underscores a growing sentiment in Congress to address the challenges posed by cryptocurrencies.

Democratic Senators Gary Peters, Dick Durbin, Tina Smith, Jeanne Shaheen, Bob Casey, Richard Blumenthal, Michael Bennet, and Catherine Cortez Masto, alongside independent Senator Angus King, have thrown their weight behind the bill. Additionally, this collaborative effort seeks to address the perceived risks linked to digital currencies and their potential misuse.

Addressing the Crypto Challenge

Senator Warren presents this act as a robust countermeasure to the illicit usage of cryptocurrencies. Highlighting the rampant misuse of digital assets by malicious entities like drug traffickers, ransomware perpetrators, and nations flouting international regulations, the act aims to strengthen the regulatory framework.

Introduced first in December and re-submitted in August 2023, key senators like Joe Manchin, Roger Marshall, and Lindsey Graham collaborated on this initiative. Moreover, the act focuses on mending regulatory gaps and ushering the crypto domain into a more compliant phase. Contrary to her opinions, the crypto community is not fond of her approach to crypto.

Greater Regulation for the Digital Realm

A crucial feature of this bill would be to mirror the regulatory environment of conventional financial institutions for cryptocurrency firms. These digital firms would need to adhere to the rigorous standards of the Bank Secrecy Act (BSA), involving Know Your Customer (KYC) and Anti-Money Laundering (AML) prerequisites. Furthermore, such regulations would encompass a range of entities in the crypto space, from digital wallet providers to miners and validators.

One of the core targets of the proposal is non-custodial or “unhosted” crypto wallets. Moreover, defined as tools facilitating the secure transaction and storage of digital assets, these wallets allow the holder complete autonomy over the stored value.

Under Warren’s plan, banks and monetary service entities will need to affirm customer and partner identities, maintain thorough records, and submit detailed reports regarding specific digital transactions. Moreover, these transactions mainly concern non-hosted wallets or those functioning in regions non-compliant with the BSA.

Additional Requirements and Implications

The bill also stipulates that U.S. residents possessing over $10,000 in cryptocurrencies in accounts abroad must furnish detailed reports. Senator Graham, supporting the act, emphasized the need for transparency in the crypto world. Highlighting the frequent misuse of digital currencies for illicit activities, Graham stated that the guidelines governing traditional currencies should also encompass cryptocurrencies.

Furthermore, Warren, who has consistently expressed her concerns about digital assets, previously linked crypto investors to Silicon Valley Bank’s downfall in an article. Additionally, she pointed out the increasing popularity of cryptocurrencies among various rogue entities, stressing the laxity in adherence to anti-money laundering norms.

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