Elizabeth Warren presents crypto know-your-customer legislation in response to the FTX crash
As U.S. authorities prepare charges against Sam Bankman-Fried, the creator of the defunct FTX cryptocurrency exchange, Senator Elizabeth Warren seeks bipartisan legislation to rein in the “dark underbelly” of the cryptocurrency business.
Senator Elizabeth Warren, a Democrat from Massachusetts, and Senator Roger Marshall, a Republican from Kansas, introduced legislation on Wednesday that would require cryptocurrency businesses in the United States to conform to the same know-your-customer regulations as banks to prevent money laundering.
The measure, which received swift opposition from leaders of the cryptocurrency sector, was introduced on the same day Warren testified before a Senate committee on the bankruptcy of cryptocurrency exchange FTX.
Warren said at the hearing that crypto’s lack of regulation has made it the ideal money-laundering tool for terrorists, ransomware groups, drug traffickers, and rogue governments.
“Crypto is not permitted to aid the world’s worst criminals… “It is time for Congress to require the crypto business to adhere to the same anti-money laundering regulations as the rest of the world,” added the senator.
The Digital Asset Anti-Money Laundering Act will bring the digital asset ecosystem into line with the know-your-customer (KYC) rules used to fight anti-money laundering in the conventional banking sector.
“It is unlawful for a bank to accept money from terrorists, which is why banks spend so much time and effort identifying their clients and reporting questionable activities to law enforcement. Many crypto businesses do not do this kind of test.”
The request from Warren and Marshall comes one day after Bankman-Fried, the former CEO of FTX, was charged with money laundering, among other charges such as consumer fraud and campaign financing violation.