New bill to combat money laundering through cryptocurrencies has been introduced in the US Senate

What’s new? US Senator Elizabeth Warren has introduced an updated version of a bipartisan bill to combat money laundering through cryptocurrencies. It proposes a customer identification (KYC) requirement for all service providers that can confirm, protect, or conduct cryptocurrency transactions, including wallet providers, miners, and validators. It is also proposed to require citizens to file reports with the Internal Revenue Service (IRS) for transactions over $10 000 through offshore institutions.

Draft law

What else is known? Democrat Warren is known for her negative attitude towards digital assets, she even announced the creation of a so-called “anti-crypto army” as part of her 2024 presidential campaign.

She filed the bill with Republican Roger Marshall, who in March of this year was one of the signatories of a letter to Binance, where the exchange was called a “hotbed of illegal financial activity.” Subsequently, having agreed with the Treasury Department, the exchange paid a fine of $4,3 billion and changed its management. The reason was accusations of money laundering.

In the updated bill, the senators write that cryptocurrencies are increasingly being used to launder money derived from hacking, fraud, and trafficking, as well as to finance terrorism. In addition, countries under sanctions, including Iran, Russia, and the DPRK, have increasingly turned to cryptocurrencies to circumvent economic restrictions and fund illegal weapons development programs.

Earlier, the US National Security Council announced cooperation with South Korea and Japan to develop measures to combat crypto hackers from the DPRK who fund WMD programs.

Senators Warren and Marshall stress that last year the volume of cryptocurrencies involved in illicit activities reached a record $20 billion, with 44% of transactions linked to under-sanctioned individuals and organizations.

Analyst Alex Thorn notes that the adoption of the bill will have devastating consequences for the US crypto sector. He explained that the bill would significantly expand the Bank Secrecy Act to cover open-source software, including non-custodial wallets, miners, and nodes.

In this, such decentralized software inherently cannot comply with information collection requirements as centralized institutions do.

“Warren’s bill would effectively outlaw crypto,” Thorn concluded.

Source: Twitter.com

In turn, analyst Tom Dunleavy was quick to reassure the public, noting that no Warren bill has been passed by Congress since 2015.

Source: Twitter.com

Earlier, Senator Ted Budd introduced a bill that would prevent federal agencies from banning the use of non-custodial wallets. The initiative aims to allow the self-storage of cryptocurrencies by retail investors.