Elizabeth Warren Crypto Regulation Bill
United States Senators Elizabeth Warren and Roger Marshall have proposed the Digital Asset Anti-Money Laundering Act of 2022. The move comes while crypto players are focused on the turmoil surrounding FTX and the contagion that followed its collapse. What does the bill state?
The seven-page bill, introduced on 14 December, would regulate digital asset kiosks, also known as automated teller machines or ATMs, and expand the classification of money service businesses (MSBs).
MSBs would be required to have and implement written Anti-money laundering policies. The bill would finalise FinCEN's proposed reporting requirements and impose new ones, such as reporting transactions exceeding $10,000 under the Bank Secrecy Act.
In addition, the bill will direct the Treasury Department to develop a rule prohibiting financial institutions from interacting with "digital asset mixers, privacy coins, and other anonymity-enhancing technologies".
It would necessitate the establishment of review processes for the entities regulated by the Securities and Exchange Commission, the Treasury Department, and the Commodity Futures Trading Commission.
Finally, the bill would impose reporting requirements on digital asset kiosk owners, FinCEN, and the Drug Enforcement Administration.
Patrick Daugherty view
Patrick Daugherty is a lawyer at Foley & Lardner, where he directs the digital assets and Web3 practice, and teaches at Cornell Law School. He has commented on the bill's pros and cons.
According to him, on the positive side, it grants federal financial regulatory agencies such as the Securities and Exchange Commission, the Treasury Department, and the Commodity Futures Trading Commission the power to audit "money services businesses" for compliance.
Peter Van Valkenburgh view
According to Coin Center's Peter Van Valkenburgh, the recent Elizabeth Warren and Roger Marshall bill may be unconstitutional. He pointed out that the anti-privacy measures it outlines, making it impossible for users to make anonymous payments, such as political donations, would violate the First Amendment.
Plus, he added, the bill may be unconstitutional under the Fourth Amendment by "deputising" miners and software developers to collect and report private information with a warrant.
What's next for the bill?
Elizabeth Warren and Roger Marshall introduced the bill in the Senate Banking Committee, intending to reintroduce it during the next congressional session, which begins in January.
According to a spokesperson, Senator Warren will continue to work in the next Congress to pass this bipartisan legislation into law. The bill will be added to an already crowded field of crypto legislation. Rather than placing investor protection against free market ideals, Hilary Allen, a law professor at American University and one of the witnesses at last week's Senate Banking hearing, claims that the bill could bring in bipartisan support by focusing on national security.
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