Sen. Elizabeth Warren’s Attempt to Crackdown on Crypto Industry Raises Concerns

Democratic Senator Elizabeth Warren from Massachusetts has introduced a bill aimed at cracking down on the alleged use of cryptocurrencies in illicit finance. This bill, named the Digital Asset Anti-Money Laundering Act, has gained support from five other Democratic lawmakers.

If passed, the law would extend Bank Secrecy Act requirements, including know-your-customer rules, to various actors in the crypto industry, such as miners, validators, and wallet providers. Three of these new supporters are colleagues of Senator Warren in the Senate Banking Committee, which holds significant influence over legislation that regulates the US economy.

However, it is highly unlikely that Warren’s bill will pass due to the well-known partisan politics, infighting, and gridlock that often hamstrings US governance. Many leaders in the crypto industry have already spoken out against the bill, and it would not be in the best interest of the American public. The proposed law would essentially make it illegal to use cryptocurrencies in the US and impose severe restrictions on the development of privacy-focused code, akin to paper money’s privacy guarantees.

Industry lobbyists, such as those at Coin Center, have argued that Warren’s bill may be unconstitutional. They have highlighted the narrow focus of the bill on surveillance rather than addressing broader issues in the blockchain technology that enabled the rise and fall of FTX.

US legislators are currently focused on passing comprehensive crypto regulatory reforms, which are necessary in light of recent events. Senator Warren’s bill fails to address these more pressing concerns and instead narrows its attention to surveillance.

One significant aspect worth noting is the timing of this bill. It comes at a time when another congressional proposal seeking to expand surveillance over digital technologies is also under scrutiny for potentially being unconstitutional. The FISA Reform and Reauthorization Act, scheduled for a floor vote, includes changes that would expand the range of US businesses that can be compelled to aid the government in conducting surveillance.

Should Warren’s bill and the FISA reform pass, it would mark a significant expansion of surveillance powers within the US. This has raised alarms among civil liberties advocates like Elizabeth Goitein, co-director of the Liberty and National Security Program at the Brennan Center for Justice.

In conclusion, Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act faces significant challenges in passing due to the nature of US politics and the opposition it has already encountered from the crypto industry. Additionally, concerns have been raised about the bill’s potential unconstitutionality, as it narrowly focuses on surveillance without adequately addressing broader concerns in the blockchain industry. The timing of the bill’s introduction coincides with another potentially controversial surveillance expansion proposal, raising further concerns about privacy and civil liberties.