The Bank Policy Institute asserts that protecting the American financial system requires integrating digital assets into the anti-money laundering framework.
Senator Elizabeth Warren, a strong opponent of cryptocurrencies, has introduced legislation that would subject digital assets to specific Anti-Money Laundering (AML) regulations. The Bank Policy Institute (BPI), a lobbying group for American banks, has welcomed this proposal.
The Digital Asset Anti-Money Laundering Act was reintroduced on July 28 by Warren, Joe Manchin, Roger Marshall, and Lindsey Graham, according to a Bloomberg article.
The law, which calls for greater openness in digital asset transactions to thwart money laundering and terrorism financing, has the support of the BPI.
The BPI emphasized that the U.S.’s current AML framework does not take into consideration digital assets, saying:
In order to protect our country’s financial system against illegal funding in all its manifestations, the existing anti-money laundering and Bank Secrecy Act framework must take digital assets into account.
If the seven-page measure is approved, it will be necessary for miners, suppliers of digital asset wallets, and other parties involved in validating and securing blockchain transactions to maintain records of the identities of their clients.
Financial institutions would also be prohibited from employing digital asset mixers, like Tornado Cash, that are intended to conceal blockchain data.
Among those who favor the legislation are the National Consumers League, the Massachusetts Bankers Association, and the National Consumer Law Center.
The BPI emphasized that the U.S.’s current AML framework does not take into consideration digital assets, saying:
In order to protect our country’s financial system against illegal funding in all its manifestations, the existing anti-money laundering and Bank Secrecy Act framework must take digital assets into account.
If the seven-page measure is approved, it will be necessary for miners, suppliers of digital asset wallets, and other parties involved in validating and securing blockchain transactions to maintain records of the identities of their clients.
Financial institutions would also be prohibited from employing digital asset mixers, like Tornado Cash, that are intended to conceal blockchain data.
Among those who favor the legislation are the National Consumers League and the Massachusetts Bankers Association.
The crypto community, her, the crypto communityrding to her, wants decentralized software-based organizations to be excluded from AML regulations.
Warren said at the hearing, “In other words, they want a huge loophole for DeFi inserted into the law so they can launder money whenever a drug lord or a terrorist pays them to do so.