United States Democratic Senator Elizabeth Warren is joining hands with Republican Senator Roger Marshall to work on a bipartisan bill that aims to combat crypto money laundering.
The bill dubbed “Digital Asset Anti-Money Laundering Act,” will attempt to bring the crypto sector into compliance with the existing anti-money laundering laws in the global financial system.
Bill Aims to Combat Crypto Money Laundering
The legislation also seeks to close loopholes in the financial system that allow digital assets to be used for money laundering.
“I’ve been ringing the alarm bell in the Senate on the dangers of these digital asset loopholes, and I’m working in a bipartisan manner to pass common-sense crypto legislation to better safeguard U.S. national security,” Warren said in a statement.
The bill would direct the Financial Crimes Enforcement Network (FinCEN) within the Treasury Department to designate crypto asset wallet providers, miners, validators, and others as money service businesses and would extend responsibilities under the Bank Secrecy Act to the crypto sector.
Furthermore, the bill will require digital asset ATM operators to submit the physical locations of their kiosks.
Banks to Be Banned From Using Crypto Mixers
The Digital Asset Anti-Money Laundering Act also aims to prohibit banks and other financial institutions from using crypto mixers or transacting with crypto assets that have used the mixers.
A few months ago, the United States sanctioned the crypto mixer Tornado Cash for allegedly helping criminals to launder billions of dollars in crypto assets, which includes about $455 million stolen by the Lazarus Group, a North Korean hacking organization.
“Following the September 11, 2001 terrorist attacks, our government enacted meaningful reforms that helped the banks cut off bad actors’ from America’s financial system. Applying these similar policies to cryptocurrency exchanges will prevent digital assets from being abused to finance illegal activities without limiting law-abiding American citizens’ access,” Marshall said.
Meanwhile, the latest development comes a month after cryptocurrency exchange FTX filed for bankruptcy after its former CEO, Sam Bankman-Fried (SBF), used customers’ funds to prop up his trading firm Alameda Research. Federal prosecutors in Manhattan recently charged SBF with eight criminal counts, ranging from wire fraud to money laundering.
Since the FTX debacle, lawmakers have been looking to speed up regulations around the crypto sector.
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