Together with some supporters, US Senator Elizabeth Warren wants to take action against crypto money laundering. The latest version of their bipartisan bill could soon be introduced in the Senate.
• Digital Asset Anti-Money Laundering Act finds more supporters
• Criminal crypto transactions threaten national security
• Crypto tax gap worth tens of billions could be closed
US Senator Elizabeth Warren was able to significantly expand the circle of supporters for her bill on crypto money laundering. Together with Roger Marshall as well as Joe Manchin and Lindsey Graham, the senator from Massachusetts published the bipartisan draft bill for the “Digital Asset Anti-Money Laundering Act”. Nine senators are named as new supporters on the senator’s homepage: Democratic representatives Gary Peters, Dick Durbin, Tina Smith, Jeanne Shaheen, Bob Casey, Richard Blumenthal, Michael Bennet and Catherine Cortez Masto as well as independent Senator Angus King from Maine. Digital assets must also be taken into account in the existing anti-money laundering regulations and the Bank Secrecy Act (BSA), which is why the Bank Policy Institute, the Massachusetts Bankers Association, Transparency International US, Global Financial Integrity, the National District Attorneys Association also supported the Major County Sheriffs of America, the Massachusetts Sheriffs’ Association, AARP, the National Consumer Law Center and the National Consumers League approved the bill, according to the senator’s website.
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Crypto Money Laundering Act: National Security and Tax Millions
The current version of the bill proposes to crack down on non-custodial crypto wallets, defined as “software or hardware that facilitates the storage of public and private keys used to digitally sign and securely transact digital assets so that the stored value “is the property of the wallet owner and the wallet owner has completely independent control over the value.” According to the draft law, banks and service companies should be obliged to check, record and subject to compliance checks the identity of customers as well as crypto transactions that involve non-hosted wallets or wallets that are hosted in countries that are not compliant with the Bank Secrecy Act.
“Our growing coalition shows that Congress is ready to take action – our bipartisan bill is the toughest proposal on the table that curbs the illegal use of cryptocurrencies and gives regulators more tools in their toolbox,” Senator Warren wrote in the Press release. The bipartisan bill is intended to help ensure that “rogue states like Russia and North Korea” can no longer use cryptocurrencies to finance their criminal activities. According to the draft, cryptocurrency platforms should then be subject to the same anti-money laundering laws as banks. Given the number of supporters, it is now time to bring the bill to the Senate.
In addition to creating transparency, the anti-money laundering law should also ensure supervision of the crypto industry and close loopholes for criminals. The aim of the law is to strengthen the fight against illegal activities and actors for the benefit of national security and to provide the institutions with appropriate instruments. Without proper regulation of cryptocurrencies, billions of US dollars could continue to be laundered past the authorities. If criminal and terrorist organizations exploit these regulatory gaps, this ultimately endangers national security. “I support the Digital Asset Anti-Money Laundering Act to ensure that cryptocurrencies are subject to existing regulations and to crack down on the criminals who use cryptocurrencies to launder money, traffic drugs and commit cybercrimes,” said Senator Dick Durbin in the Press release quoted.
According to estimates by the initiator of the bill, the USA will miss out on around $1.5 billion in tax revenue for the 2024 budget year. Elizabeth Warren believes there is a “$50 billion crypto tax gap.”
Goals of the Digital Asset Anti-Money Laundering Act at a glance
The bipartisan bill seeks to expand responsibilities under the Bank Secrecy Act. This refers to both the know-your-customer requirements and the verification of digital service providers, be they wallet providers, miners, validators or others involved in the transactions. The Bank Secrecy Act should also be expanded to include the reporting of foreign bank accounts. BSA obligations then arise through directing both the Treasury Department and the SEC and the Commodity Futures Trading Commission to establish compliance audit and review processes.
An audit of digital transactions is intended to make it impossible to circumvent AML and sanctions checks using non-hosted wallets. In the future, guidelines will be issued by FinCEN to keep financial institutions informed about the risks of digital assets, such as anonymization technologies.
Editorial team finanzen.net