U.S. Senator Elizabeth Warren has written an open missive to the nominee chosen by President Donald Trump to head the U.S. Treasury, advising him to consider implementing stronger oversight and regulatory practices for digital currencies should he assume the position.
In a public letter dated January 12th, Warren posed a question to the nominee for Treasury Secretary, Scott Bessent, inquiring whether the Treasury Department might benefit from expanded authority to regulate or impose sanctions on the cryptocurrency industry.
Warren proposes that anti-money laundering (AML) and counter-terrorist financing (CFT) programs, as well as sanctions programs, should contain risk-based measures specifically tailored to prevent money laundering or terrorist financing related to digital assets.
Based on Warren’s explanation, malicious individuals often employ cryptocurrencies in illicit activities, such as money laundering, circumventing economic sanctions, funding operations like North Korea’s nuclear development, and financing ransomware attacks.
It’s been observed that malicious individuals are progressively utilizing cryptocurrencies for illicit activities like money laundering, circumventing sanctions, funding critical security concerns such as Russia’s invasion of Ukraine, North Korea’s nuclear program, China selling prohibited weapons components to sanctioned countries, and ransomware attacks. This is according to Warren’s statement.
Additionally, she inquired of Bessent if the department’s authority over Anti-Money Laundering and Counter-Terrorism Financing could be expanded to incorporate a secondary sanctions mechanism. This tool, if implemented, would enable the department to disconnect fintech and crypto operators from their connections to the United States.
Warren has enquired about two matters: First, whether the Office of Foreign Assets Control (OFAC) should be able to regulate stablecoins. Second, whether Congress should give the Treasury Department’s Bank Secrecy Act (BSA) authority to cover overseas companies dealing with US markets and clients.
Under the Bank Secrecy Act, financial organizations are obligated to keep necessary transaction records and submit regular reports to the United States Department of the Treasury.
As it stands now, American cryptocurrency platforms, digital wallets, and other service providers need to adhere to specific Anti-Money Laundering (AML) rules when they’re involved in tasks such as trading, moving, or safeguarding digital currencies.
Warren requests that Bessent is ready to address these queries during his confirmation hearing, which is scheduled for January 16th.
In a post dated January 13th on platform X, Alexander Grieve, Vice President of Government Affairs at cryptocurrency investment company Paradigm, stated that although the questions appear perfectly legitimate, Grieve implied they might conceal a more extensive objective from Senator Warren.
He stated, “What they’re hiding could serve as a just cause (casus belli) for Warren to advocate for an extensive expansion of Anti-Money Laundering (AML) regulations, given the neutral stance of cryptocurrency technology providers.
As the Ranking Member beginning our role, this initial move is quite strong. You can anticipate Senator Warren to be highly engaged and visible during the minority period, according to Grieve.
Senator Warren has been actively calling for stringent regulations for the crypto industry.
In both 2022 and 2023, she proposed the Digital Asset Anti-Money Laundering Act with an aim to align the cryptocurrency sector with the current Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CTF) regulations.
The bill was criticized by the US-based crypto advocacy group, the Chamber of Digital Commerce, along with 80 former military and national security experts, who argued that it might impede law enforcement efforts and escalate national security worries by potentially pushing the digital asset sector abroad.
Warren’s open letter arrives less than a week prior to U.S. President-elect Trump’s inauguration on January 20th, during which he intends to fulfill his pledges regarding cryptocurrencies, as he had stated in his campaign speeches the previous year.
Over 300 pro-cryptocurrency representatives have been elected to Congress, leading some industry experts to predict that the U.S. administration could potentially be the most supportive of cryptocurrencies in history.
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2025-01-14 06:31