US Senator Elizabeth Warren said any new crypto regulation, including the newly proposed regulatory framework for the stablecoin market, must include the full suite of anti-money laundering authorities that the Treasury Department requested in November 2023.
In an April 16 letter to U.S. Treasury Secretary Janet Yellen, Senator Warren expressed her position and advocated expanding anti-money laundering and anti-terrorist financing (AML/CFT) obligations to include miners , validators and DeFi intermediaries also provide coverage. stablecoin issuers.
Warren’s argument
According to her, any regulatory frameworks for stablecoins would bring the sector “deeper into the banking system [and] will boost crypto market trading, increasing the opportunities for terrorists and other bad actors to exploit these funding channels to both evade sanctions and receive a limitless stream of untraceable revenue.”
Senator Warren further highlighted the perceived national security threats posed by cryptocurrencies, citing Assistant Treasury Secretary Adewale Adeyemo’s recent testimony before Congress.
She highlighted cases where terrorist entities such as Hamas are allegedly exploiting blockchain technologies for their fundraising, claiming that the heavily sanctioned country Iran, for example, derives significant revenue from validating blockchain transactions and mining Bitcoin.
Consequently, she argued that “excluding miners, validators, and other intermediate nodes in the DeFi system from the AML/CFT requirements of the stablecoin law would allow bad actors to profit from the increase in crypto trading that the stablecoin legislation would provide.”
Warren added:
“Any legislation that increases the attractiveness of crypto to mainstream crypto traders will increase the money-making opportunities for sanctioned entities like Iran and the criminal underground.”
Crypto Community Responds
Warren’s latest mission on the emerging industry has drawn several responses from crypto stakeholders.
Caitlin Long, CEO and founder of Custodia Bank, said Warren’s letter completely missed the risk to the banking system and urged lawmakers to “consider consulting with someone who has actually reduced the risks of a major bank, instead of blindly spouting talking points.”
Similarly, John Deaton, a pro-crypto candidate running for Warren’s Senate seat, has thought that the letter further shows that she is “working hard on behalf of the banking sector.”
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