“Big-time financial criminals love crypto,” Democratic Senator Elizabeth Warren said at a Senate Banking Committee hearing on Tuesday, where she advocated for tougher anti-money laundering restrictions to crack down on crime in the cryptocurrency sector.
Warren is one of the crypto’s toughest critics in the senate, she has raised concerns in most aspects of the sector, from consumer protection to its environmental impact. This time, she shifts the conversation to the sector’s impact on national security — the current theme of the season.
“Just last year — just in one year — crypto was the payment method of choice for international drug traffickers, who raked in over a billion dollars through crypto,” the senator said. “North Korean hackers, who stole $1.7 billion and funneled that money into their nuclear program; and ransomware attackers, who took in almost $500 million. The crypto market took in $20 billion last year in illicit transactions.”
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The Democrat, with Republican Senator Roger Marshall, will be reintroducing an anti-money laundering bill that would “clamp down on crypto crime” and allow regulators to prevent the flow of funds to criminals, including “traffickers in places like North Korea and Iran.”
The original version of the bill, which was introduced in December, would prohibit banks and other financial institutions from transacting with digital asset mixers or “a website, software, or other service designed to conceal or obfuscate the origin, destination, and counterparties of digital asset transactions.” It would also require these more crypto service providers to verify the identities of their customers.
It was criticized by crypto supporters as a broad, unconstitutional assault on “the personal freedom and privacy of cryptocurrency users and developers.” It was also deemed “so vague and broad-reaching that just understanding and implementing its ramifications could take years,” by Liz Boison, a Hogan Lovells partner who was previously a federal prosecutor who served at the Consumer Financial Protection Bureau when the same Elizabeth Warren was launching it.
Warren and Marshall have yet to reintroduce the legislation, but the new tack appears to be to recruit conservatives like Marshall into the cause. Warren reached out to Marshall to co-sponsor after the Republican raised concerns about the digital currency’s role in drug trafficking and ransomware attacks.
“The physician in me says the risks [of crypto] do not outweigh the benefits,” said Marshall, who is an OB-GYN. “Until they solve the national security issues, I don’t see the benefits outweigh the risks.”
Bipartisan support for the legislation could give the bill the push it needs. But Warren and Marshall have a lot of work to do. Also…
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