US Senator Elizabeth Warren has introduced legislation addressing concerns about the alleged misuse of digital currencies for illicit activities.
The bill, supported by a coalition within the Banking Committee, signals a significant push for increased oversight and regulation within the Bitcoin and cryptocurrency sphere.
The focus is on addressing risks associated with cryptocurrencies, such as money laundering, drug trafficking, and sanctions evasion.
Additional Regulatory Burden
Senator Warren stated:
“The Treasury Department is making clear that we need new laws to crack down on crypto’s use in enabling terrorist groups, rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions in stolen funds, evade sanctions, fund illegal weapons programs, and profit from devastating cyberattacks.”
The proposed bill aims to mandate stricter reporting requirements by extending the Bank Secrecy Act (BSA) responsibilities.
This includes enforcing Know-Your-Customer (KYC) requirements and filing reports on “transactions involving unhosted wallets.”
The objective, ostensibly, is to close loopholes and bring the digital asset ecosystem into greater compliance.
The legislation has gained support from various entities, including the Bank Policy Institute, Massachusetts Bankers Association, Transparency International U.S., and others.
The collective effort aims to equip regulators with additional tools to combat the illicit use of cryptocurrencies.
Warren’s Campaign Against Crypto
Senator Warren is well known for her campaign against crypto, taking to Congress to air her views on how crypto potentially threatens national security.
Bitcoin’s Growing Popularity
This legislative move coincides with the increasing popularity and adoption of Bitcoin worldwide, notably in the United States.
The Securities and Exchange Commission (SEC) is set to decide next month on the approval of the US’s first spot Bitcoin exchange-traded fund (ETF).
Approval could potentially trigger significant institutional and retail demand for BTC.