By
Mercy Tukiya Mutanya
February 28th, 2024
According to Warren, the crypto industry should be governed by common-sense regulations like banks, brokers, and Western Union.
Senator Elizabeth Warren and Roger Marshall have introduced the Digital Asset Anti-Money Laundering Act which essentially is aimed at introducing several regulations that are being looked at as extremely tough and unlawful.
Amid this week’s United States Senate hearings about the downfall of popular crypto exchange FTX, the news of suggested rules has not gone down well with crypto enthusiasts who think the move is extremely dictatorial. The bill strives to position know-your-customer (KYC) requirements on blockchain establishment providers and contenders functioning in the United States, which also includes developers designing software for decentralized networks and even the miners and validators that back such networks. Warren and Marshall’s bill would require the Financial Crimes Enforcement Network (FinCEN) to assume crypto wallet service providers, miners and validators, and additional network users as “money service businesses”, according to Warren’s official statement.
The bill would also affect unhosted, or self-custody crypto wallets that require platforms and networks to specify such customers and follow their transactions. FinCEN offered a similar mandate in December 2020, which several crypto firms spoke against. The bill also plans to conclude the exact procedure. Moreover, the bill disallows any financial establishment from utilizing a virtual asset mixer service or alternate privacy-enhancing technology.
According to Warren, the crypto industry should be governed by common-sense regulations like banks, brokers, and Western Union. The bipartisan bill will aid close crypto money laundering problems and bolster implementation to better secure US national security.
The conjectured bill has already been at the receiving end of criticism from the crypto space. Crypto advocacy group Coin Center called the bill opportunistic, with an unethical charge on cryptocurrency self-custody, developers and node operators. According to the Director of Research at Coin Center, Peter Van Valkenburgh, the Digital Asset Anti-Money Laundering Act is an instance of brazen aggression on the technological prowess and privacy of crypto participants.
He also went on to claim that the suggested bill was more significantly a symbol of rejection of liberal values and an unwarranted way to put every individual under surveillance. The bill was presented after November’s fall of the exchange FTX, with founder Sam Bankman-Fried arrested this week by Bahamian police under several criminal charges from the US regulatory authorities.
Bankman-Fried also suffers several charges from the US Securities and Exchange Commission and Commodity Futures Trading Commission, along with Complex Frauds and Cybercrime Unit at the Southern District of New York US Attorney’s Officer. Coin Center says that the bill will not allow another FTX-like fall in the future.
The suggested bill has gained similar criticism as the previous year’s infrastructure bill, which transformed the Internal Revenue Service’s definition of a “broker” to comprise firms that trade crypto tokens, pushing exchanges to convey the transfer of funds to the authorities.
