WASHINGTON — Sens. Elizabeth Warren, D-Mass., and Roger Marshall, R-Kan., introduced legislation Wednesday that would extend existing anti-money- laundering laws and rules to cryptocurrency.
The Digital Asset Anti-Money Laundering Act would extend know-your-customer rules to crypto participants, including wallet providers and miners, and would restrict financial institutions from doing business with digital asset mixers. It would also give the Financial Crimes Enforcement Network cover to implement a proposed rule that would require financial institutions to report certain transactions involving unhosted wallets.
The bill, which has little chance of being passed in the waning weeks of the current Congress, comes shortly after the dramatic arrest of FTX founder Sam Bankman-Fried. The Senate Banking Committee, which includes both Warren and Marshall, held a hearing on FTX's collapse shortly after the senators announced their legislation.
Warren said that the bill, if passed into law, would apply banklike standards to the crypto industry.
"Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism," Warren said in a statement. "The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions."
The bill is also a rare piece of bipartisan legislation. Laws related to national security tend to get more bipartisan support, and it's been an effective avenue for financial policy bills, in particular. The Treasury Department, the senators said, has warned that digital assets are increasingly being used for money launder, theft, fraud schemes and terrorist financing.
"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," Marshall said. "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."
