Wall Street Bank Endorses Elizabeth Warren’s Strict Crypto Bill – Senator Elizabeth Warren, a prominent critic of cryptocurrencies, surprisingly gained the backing of the Bank Policy Institute (BPI), a Washington-based banking advocacy group. The BPI expressed support for her newly proposed bipartisan legislation aimed at regulating the crypto industry and closing loopholes related to illicit activities.
This alliance is unusual as Senator Warren and Wall Street banks have seldom found common ground in the past, with the Senator frequently criticizing the trade group. Surprisingly, the Bank Policy Institute (BPI) backed the bill, advocating for stricter anti-money laundering rules and counter-terrorism financing measures targeted specifically at the crypto industry. The BPI’s rationale behind this decision is that the current anti-money laundering structure in the US does not adequately address digital assets.
Explaining its decision to back the legislation, the banking lobbyists said: “BPI supports bipartisan efforts to help crack down on money laundering and believes this measure is an important step in that direction. The existing anti-money laundering and Bank Secrecy Act framework must account for digital assets, and we look forward to engaging in this process to defend our nation’s financial system and illicit finance in all its forms.”
Back in December 2022, the bill was initially introduced by Massachusetts Senator Elizabeth Warren, just a month after the dramatic collapse of FTX. On Friday, Senator Warren, along with three other Senators – Joe Manchin from West Virginia, and Republicans Roger Marshall from Kansas and Lindsey Graham from South Carolina – reintroduced the bill. In addition to the Bank Policy Institute (BPI), various other organizations have also endorsed the bill.
These include the Massachusetts Bankers Association, Transparency International US, Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, Massachusetts Sheriff’s Association, AARP, National Consumer Law Center (representing low-income clients), and the National Consumers League. The bill aims to broaden the scope of the Bank Secrecy Act (BSA) by applying Know Your Customer (KYC) requirements to crypto wallet providers, miners, validators, and other participants in the network.
Furthermore, it addresses a significant concern regarding “unhosted” digital wallets that allow users to bypass Anti-Money Laundering (AML) and sanction checks. The legislation includes provisions for FinCEN to issue guidance to financial institutions on how to handle digital assets mixed with coin mixers like Tornado Cash and other privacy technologies.
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Other provisions in the seven-page legislation involve strengthening the enforcement of BSA compliance, extending BSA rules to include reporting of foreign bank accounts in relation to digital assets, and granting FinCEN oversight on illicit financial risks associated with digital asset ATMs.
This development follows another crucial crypto bill, FIT21, which aims to resolve the regulatory jurisdictional dispute between the SEC and the CFTC and provide much-needed clarity to the crypto industry. FIT21 has gained support from various players in the crypto space, including Coinbase CEO Brian Armstrong.