Sen. Elizabeth Warren on Wednesday unveiled the Digital Asset Anti-Money Laundering Act of 2022, a piece of bipartisan legislation that aims to combat cryptocurrency money laundering.
Sen. Roger Marshall of Kansas is a co-sponsor of the legislation, which aims to “mitigate the risks that cryptocurrency and other digital assets pose to the United States’s national security by closing loopholes” in the system currently in place to combat money laundering. The objective is to establish compliance requirements for digital currencies that are more akin to the regulations that apply to the rest of the financial system.
The bipartisan bill aims to change the lack of US cryptocurrency regulation that has existed for years. For instance, the bill would extend to digital assets certain obligations under the Bank Secrecy Act, such as the Know-Your-Customer requirement, which requires banks to confirm the identity of their clients.
The collapse of FTX, formerly the second-largest cryptocurrency exchange in the world, and Sam Bankman-Fried’s subsequent arrest—who is now facing charges of money laundering among other things—followed the most well-known cryptocurrency scandal to date.
In a statement, Warren argued that regulations for the cryptocurrency sector should be similar to those that apply to other financial institutions. In a statement, Warren claimed that “rogue countries, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism. This legislation would ensure that the same standards apply to similar financial transactions and that the cryptocurrency industry adheres to common sense rules like banks, brokers, and Western Union.
According to a statement from Warren’s office, cybercriminals made a record high of at least $14 billion in digital assets last year. The senator from Massachusetts took part in the Senate Banking Committee hearing on the collapse of FTX on Wednesday.
