Cracking Down on Crypto: Elizabeth Warren Leads Senators in Push for Stricter Cryptocurrency Regulation

Senator Elizabeth Warren and five fellow senators are backing the “Digital Asset Anti-Money Laundering Act,” aiming to tighten rules for cryptocurrency use in illicit finance. The bill, critiqued by the crypto industry, extends financial regulations to miners, validators, and wallet providers under the Bank Secrecy Act.

Three new sponsors, Senators Warnock, Butler, and Van Hollen, sitting on the Senate Banking Committee, join Warren, implying the committee’s potential role in shaping crypto-related laws. Senators Hickenlooper and Luján also joined as co-sponsors.

Van Hollen highlighted concerns about crypto’s lack of regulation, emphasizing the risks it poses and its misuse by criminal entities. Warren has advocated for this bill during congressional hearings, aligning with the Treasury Department’s requests for more authority to tackle illicit crypto activities. 

There’s a growing focus on anti-money laundering efforts involving crypto, with suggestions from Representative McHenry that the House should explore such regulations, hinting at possible collaboration between the House and Senate. McHenry, who won’t seek re-election, has been influential in pushing crypto-related bills, aiming for stablecoin and comprehensive market structure regulation, needing Senate support.

Warren’s Response to The Bill

Senator Warren highlighted in a CNBC interview, that her bill isn’t just about the US; it’s global. She pointed out that countries like North Korea are using cryptocurrencies like Bitcoin to fund their nuclear weapons programs. This shows how digital currencies can be misused internationally, not just within the US.

Anti-Crypto Laws May Affect Bitcoin ETF

Even though such discussions create FUD in the market, analysts say they might push Bitcoin’s price above $50,000. The lack of a spot Bitcoin ETF approval and expectation of the upcoming BTC halving event make the market more speculative.

But the timing is critical for Bitcoin and the crypto market. Right now it aligns with the SEC’s potential approval of the first US Bitcoin ETF on Jan 10th, expected to trigger a spike in Bitcoin interest from both institutional and retail investors.

Crypto Reaction

John E. Deaton accused Senator Elizabeth Warren of her double standards with SEC Chair Gary Gensler, claiming she shared hearing questions in advance. Deaton questioned why Warren didn’t address the missing investigation into FTX’s former CEO. 

Meanwhile, JPMorgan Chase CEO Jamie Dimon took a strong anti-crypto stance, suggesting the government should shut it down.

After Warren and Dimon’s statements, former NSA contractor and whistleblower Edward Snowden also blasted Warren for allegedly having bank ties.