The crypto community is facing a new threat from the US Congress, as five more senators have joined Elizabeth Warren in co-sponsoring the “Digital Asset anti-Money Laundering Act”. This bill, if passed, would impose draconian regulations on the crypto industry, stifling innovation and harming millions of users.
According to Warren, crypto is a highly volatile and speculative asset class that is prone to manipulation, fraud, and hacking. She cited several examples of crypto-related scams, thefts, and ransomware attacks that have harmed millions of investors and users. She also claimed that crypto is undermining the authority and effectiveness of central banks and regulators, who are responsible for ensuring the safety and soundness of the monetary system.
She cited examples of how crypto markets have crashed due to hacking, technical glitches, or rumors, and how these events have wiped out billions of dollars of value and harmed investors and consumers. She also warned that crypto could undermine the effectiveness of monetary policy and fiscal stimulus, as well as the role of the US dollar as the global reserve currency.
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Warren also claimed that crypto is a danger to consumer protection, because it lacks the safeguards and guarantees that traditional financial products and services offer. She pointed out that crypto users have no recourse if they lose their private keys, get scammed, or face technical issues.
The bill would require all crypto transactions over $10,000 to be reported to the Financial Crimes Enforcement Network (FinCEN), regardless of whether they involve fiat currency or not. It would also expand the definition of “money transmitter” to include any entity that facilitates the transfer, exchange, or storage of digital assets, such as wallets, exchanges, and decentralized platforms. This would subject them to onerous licensing and compliance requirements, as well as potential criminal penalties for non-compliance.
The bill’s sponsors claim that it is necessary to combat money laundering, terrorism financing, and tax evasion using crypto. However, these claims are based on false assumptions and outdated stereotypes. Crypto is not inherently more prone to illicit activity than fiat currency, and in fact, it offers more transparency and traceability than cash.
Moreover, the existing anti-money laundering (AML) framework already covers crypto transactions that involve fiat currency, and there are many legitimate use cases for crypto that do not involve fiat currency at all.
The bill would effectively create a surveillance state for crypto users, violating their privacy and civil liberties. It would also create a barrier to entry for new and innovative crypto projects, especially those that are decentralized and permissionless.
It would discourage investment and adoption of crypto in the US, while giving an advantage to other countries that are more friendly and supportive of the crypto industry.
The bill is a clear example of how some lawmakers are out of touch with the reality and potential of crypto. It is based on fear and ignorance, rather than facts and evidence. It is an attack on the crypto community and its values of freedom, innovation, and inclusion. It must be opposed and defeated by all who care about the future of finance and technology.