Nine US Senators have endorsed Senator Elizabeth Warren’s comprehensive crypto regulation bill, called the Digital Asset Anti-Money Laundering Act. The senator announced the formation of a bipartisan coalition, including Democrats and an independent senator, showing a united front in tackling crypto’s role in financial misdemeanors such as money laundering and drug trafficking.
This endeavor has not only received the backing of lawmakers but also renowned organizations. Groups such as Transparency International U.S., Global Financial Integrity, and the National District Attorneys Association have publicly endorsed the bill, highlighting its potential in providing regulators with the necessary tools to control crypto’s illicit use effectively.
Inside the Bill
Reintroduced in July 2023 with notable co-sponsors, the current version of the bill focuses on several key areas to tighten crypto regulation. These include:
- Cracking down on noncustodial digital wallets: Aiming to reduce the misuse of digital wallets in facilitating illegal activities.
- Extending Bank Secrecy Act responsibilities: Enhancing the existing regulatory framework to include newer forms of financial activities facilitated through cryptocurrencies.
- Establishing an Anti-Money Laundering/Combating the Financing of Terrorism compliance examination: Setting up a comprehensive compliance framework to deter the illicit usage of digital assets.
The coalition believes that implementing these legal measures will pave the way to fight the illicit use of digital money substantially.
Closing the Crypto Tax Gap
Senator Warren warns of a substantial “crypto tax gap,” a discrepancy that could cost the U.S. Treasury a staggering $1.5 billion in lost tax revenues for the fiscal year 2024. To prevent this, she urges a timely update of the tax policy surrounding digital assets, emphasizing that action needs to be taken before it escalates further.
As the bipartisan coalition grows, Senator Warren accentuates the readiness of the Congress to initiate action. By introducing the toughest proposal on the table, the coalition is optimistic about giving regulators the arsenal they need to control crypto’s illicit use and to ensure the safety and security of digital asset transactions in the US.
As discussions around the bill advance, it remains to be seen how this legislative piece will reshape the crypto landscape in the country, marking a significant step towards robust crypto regulation.