• Senator Elizabeth Warren is reintroducing the AML Act of 2022 to include decentralized entities like DeFi and DAOs.
• The recent hostile moves by US regulators have raised fears of a crypto crackdown.
• The bill seeks to cover the broader crypto market which current AML laws do not cover.
Senator Warren Introduces AML Bill
Senator Elizabeth Warren has announced her intention to reintroduce the Digital Asset Anti-Money Laundering Act of 2022 that she first introduced on Dec. 15, 2022. The new bill will extend coverage to decentralized entities such as decentralized finance (DeFi) protocols and decentralized organizations (DAOs).
Recent Regulatory Moves
The past few weeks have seen several regulatory actions in the US including Kraken having to pay $30 million in fines for its crypto-staking product, and the SEC accusing Paxos Trust of issuing an unregistered security, the Binance USD (BUSD). This has caused much speculation about a potential crypto crackdown by authorities in the US.
AML Requirements for DeFi & DAOs
During a Senate Banking Committee hearing called ‚Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets‘, Sen. Warren said that some members of the crypto community want „a giant loophole for DeFi written into the law so they can launder money whenever a drug lord or terrorist pays them to do so“. Because of this, she believes it is important to include decentralized entities in existing anti-money laundering policies as these currently don’t cover them.
Purpose of AML Bill
The purpose of Sen. Warren’s bill is to close this gap by ensuring that all digital assets are subject to anti-money laundering requirements in order to protect consumers from fraud and other financial crimes. It also seeks to ensure that digital asset transactions are adequately monitored and reported so that suspicious activities can be identified quickly and appropriate action taken against those involved in criminal activities involving cryptocurrencies or other digital assets.
Sen. Warren’s AML bill provides an important step towards regulating digital assets more effectively while still protecting consumers from fraud and other financial crimes related with cryptocurrencies or other digital assets transactions. It will ensure that all transactions involving digital assets are adequately monitored and reported, enabling authorities to identify suspicious activity quickly and take appropriate action against those responsible for criminal activities involving cryptocurrencies or other digital assets