Two US Senators, including Elizabeth Warren, have put forth a piece of bipartisan legislation to regulate cryptocurrency. The bill, titled “Digital Asset Anti-Money Laundering Act of 2022,” has been labeled as “the most direct attack on the personal freedom and privacy of cryptocurrency users and developers that we have seen so far,” by cryptocurrency proponents.

The Digital Asset Anti-Money Laundering Act to be Implemented in 2022

US Senators Elizabeth Warren (D-MA). Roger Marshall (R-KS), introduced legislation to regulate cryptocurrency on Wednesday. The Bill, titled “Digital Asset Anti-Money Laundering Act of 2022,” is focused on curbing money laundering in the crypto industry.

Senator Warren Tweeted Wednesday:

By closing loopholes and applying common sense rules, we can stop rogue nations and oligarchs from using cryptocurrency to launder billions of dollars, evade sanctions and finance terrorism. I have a bipartisan proposal for this.

The legislation regulates Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to designate “custodial and non-hosted wallet providers, cryptocurrency miners, validators, or other nodes that may act to validate or secure transactions from third-party, independent network participants, including MEV finders, and other validators with control of network protocols such as money service businesses,” according to the text of the bill.

Crypto Policy think tank Coin Center stated that Senator Warren’s Legislation would “force anyone who helps maintain the public blockchain infrastructure, whether through software development or validating transactions on the network, to register as a financial institution (FI).” As an FI, they would need to record and identify the personal information of everyone who uses their software, or sends money through their system.

Additionally, the legislation would ban all FIs from engaging in transactions involving privacy tools such as Tornado Cash, regardless of any evidence of criminality related to those transactions, Coin Center noted.

Senator Warren Criticized Over New Cryptocurrency Bill

Many people on Twitter criticized Senator Warren for her new cryptocurrency bill. Pro-bitcoin Senator Cynthia Lummis tweeted: “Requiring open-source developers to integrate AML/KYC into hardware wallets and nodesoftware won’t work.”

Blockchain law professor JW Verret answered Warren’s tweet: “This bill makes it much easier for criminals, and worse, to violate civil rights through donor surveillance. Contrary to what is being claimed about the extent of the misuse, Treasury testimony here is fundamentally misleading.”

Neeraj Agrawal, Coin Center’s Director of Communications, stated: “Warren’s new bill is a disaster. It would do nothing to prevent the next FTX.” Commenting on Warren’s cryptocurrency bill, Jerry Brito, CEO of Coin Center tweeted:

The bipartisan Anti-Money Laundering Digital Assets Act introduced by Senators Warren and Marshall is the most direct attack against the privacy and personal freedom of developers and users of cryptocurrency that we have ever seen.

What do you think of the new cryptocurrency bill proposed by Senator Elizabeth Warren? Please let us know your thoughts in the comments section.

kevin helms

Kevin is an Austrian Economics student who discovered Bitcoin in 2011 and became an evangelist for the crypto asset. His interests lie in Bitcoin security, open source software, network effects, and the intersection between economics and cryptography.