Senator Warren urges Trump’s Treasury pick to consider stricter crypto regs
US Senator Elizabeth Warren has written an open letter to Donald Trump's nominee to lead the US Treasury, urging them to review stricter regulations and enforcement measures on digital assets if he takes office.
In a Jan. 12 open letter, Warren asked Treasury Secretary Scott Besant whether the Treasury secretary should have more power to approve the sector.
“AML/CFT and sanctions programs should include risk-based provisions reasonably designed to prevent terrorist financing involving money laundering or digital assets,” wrote Warren, the top Democrat on the Senate Banking, House and Urban Affairs Committee.
According to Warren, bad actors use cryptocurrency for criminal activities such as money laundering and sanctions evasion, and to finance North Korea's nuclear program and ransomware attacks.
“Bad actors are turning to cryptocurrency to fund money laundering, sanctions evasion, and major national security threats such as Russia's invasion of Ukraine, North Korea's nuclear program, China's sale of weapons components to embargoed countries, and ransomware attacks. ” said Warren.
She also asked Bess whether the department's anti-money laundering and counter-terrorism financing powers should include a secondary sanctions tool to “disassociate fintech and crypto operators from U.S. ties.”
Warren wrote a 31-page letter to the Treasury nominee asking dozens of questions during his January 16 confirmation hearing. Source: Elizabeth Warren
Warren has questioned whether the Office of Foreign Assets Control should have jurisdiction over stablecoins and whether Congress should extend the Treasury's Bank Secrecy Act authority to include overseas companies connected to US markets and clients.
The Bank Secrecy Act requires financial institutions to keep transactional records and file reports with the US Treasury Department.
Current regulations require US crypto exchanges, wallet providers and other service providers to comply with certain BSA requirements if they engage in activities such as trading, transferring or storing digital assets.
Warren asked Besant to be prepared to discuss those questions at his confirmation hearing on January 16.
Related: Foreign Crypto Miners May Be Spying on US Bases: Elizabeth Warren
In a January 13 post on X, Alexander Grieve, vice president of government affairs at crypto investment firm Paradigm, said that while all of the “questions seem entirely reasonable to ask, Grieve may be hiding a broader agenda from Warren.”
“What they cover is Warren's argument for challenging the significant expansion of the AML reg against independent crypto technology providers,” he said.
“As a rank member's opening salvo, this is very strong. Expect Senator Warren to be very active within a few,” Grieve added.
Source: Alexander Grieve
Senator Warren has been actively seeking stricter regulations for the crypto industry.
In the year In 2022 and again in 2023, she introduced the Digital Asset Anti-Money Laundering Act to bring the crypto industry to heel under the existing AML and CTF frameworks.
The law was decried by the Digital Commerce Council and 80 former military and national security officials, a US-based crypto advocacy group, saying it would hinder law enforcement and increase national security risks by driving the digital asset industry overseas.
Warren's open letter comes a week before US-elect Trump's inauguration on January 20, which is expected to follow through on crypto-friendly pledges he made on the campaign trail last year.
Hundreds of pro-crypto candidates have also won seats in Congress, and industry leaders have suggested that the US government may be the most pro-crypto in history.
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