Staff Reports
Following the investigation of the FTX exchange, a bipartisan pair of US lawmakers introduced legislation aimed at combating money-laundering activities in the crypto industry.
The legislation introduced by Senator Elizabeth Warren and Representative Roger Marshall would extend the existing anti-money-laundering legislation to cover cryptocurrencies. It also requires users to report suspected money-laundering activities.
One industry group warned that the proposed legislation would have a significant impact on the cryptocurrency industry.
According to Warren, the use of digital assets by drug lords, rogue nations, and human traffickers to conceal stolen funds and finance terrorism has become a growing concern. The proposed legislation would require financial institutions such as banks and Western Union to follow common-sense regulations when dealing with cryptocurrencies.
The legislation introduced by Senator Warren and Representative Marshall would extend the existing Bank Secrecy Act’s responsibilities to include the activities of crypto miners, wallet providers, and validators. It would also require the financial crime enforcement network to develop regulations that require banks to keep records of all transactions involving cryptocurrencies.
The bill would also prohibit financial institutions from using so-called digital asset mixers, which are tools that allow users to hide the origin of their assets.
According to Jerry Brito, the director of the Coin Center, the proposed legislation is the most direct attack yet on the privacy and personal freedom of cryptocurrency users.
The bipartisan Digital Asset Anti-Money Laundering Act, introduced today by Sens. Warren and Marshall, is the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen. We explain here: https://t.co/0tAo34Qyrh
— Jerry Brito (@jerrybrito) December 14, 2022
A day after the hearing held by Congress regarding the collapse of the FTX exchange, the legislation was introduced. The exchange’s founder Sam Bankman-Fried was accused by the US Department of Justice of money-laundering and other financial crimes.
Senator Warren has been vocal about her concerns about the cryptocurrencies industry. Last week, she asked regulators to investigate the activities of Silvergate Bank, which had been a client of FTX.
Shortly after Bankman-Fried’s arrest, John Ray III, the new CEO of FTX, appeared before a panel of Congress to discuss the company’s financial practices. He was questioned about the exchange’s poor operations.
The preceding is a summary of an article that originally appeared on Washington Examiner.
