US Senator Elizabeth Warren sends crypto bill to 'know your customer' after FTX collapse

The Massachusetts Democrat, along with Sen. Roger Marshall, Republican  of Kansas, introduced legislation  Wednesday that would require  the same "know your customer" rules for crypto as banks to prevent money laundering. 

 The bill was released  the same day Warren attended a Senate committee hearing on the FTX bankruptcy. Warren told the hearing that crypto's lack of regulation has made it a key tool for terrorists, ransomware groups, drug traffickers and rogue states looking to launder money. 

 "Crypto cannot be allowed to help the world's worst criminals... It's time for Congress to hold the crypto industry to the same money laundering rules as everyone else," the senator said. 

 The new law, called the Digital Assets Anti-Money Laundering Act, would bring the digital assets ecosystem into line with the know-your-customer (KYC) requirements used  in the traditional financial system to prevent money laundering. 

 Warren said, "It's illegal for a bank to take money from terrorists, which is why banks spend so much time and  energy identifying  their customers  and reporting suspicious activity to the authorities. Many crypto companies don't do these kinds of checks." 

  Warren and Marshall's proposal comes a day after  former FTX CEO Bankman-Frieda was indicted on money laundering charges, including crimes such as defrauding clients and campaign finance violations. 

 In addition to requiring platforms to track user activity, the bill would prohibit companies from using a digital asset mixer service or other cryptographic privacy technologies.

 Cryptocurrency mixers like Tornado Cash, approved by the US Treasury Department in August, can hide the transaction history of digital assets in different digital wallets. 

 The law quickly drew backlash from some in the crypto industry. In a statement Wednesday morning, cryptocurrency advocacy group Coin Center called the bill "an opportunistic unconstitutional attack on cryptocurrency self-sufficiency, developers and node operators." 

 The current session of the US Congress, which ends in early January, puts the bill under strict deadlines. As a result, the bill would have to be reintroduced when Congress convenes unless it is voted on in time.


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