Senator Elizabeth Warren, along with other Democrats, criticized the alleged use of cryptocurrencies in illicit finance and scams during a Senate Banking Committee hearing on Thursday.
Warren, who has been critical of cryptocurrencies, has been pushing to advance its Digital Asset Anti-Money Laundering Act over the past year and has won support of 19 other senators, including Sen. Lindsey Graham, R.S.C.
""This bill would plug holes in our anti-money laundering rules to make it easier for financial regulators to track suspicious crypto activity to make it more visible and stop scammers," Warren said during a Senate Banking Committee hearing Thursday to discuss Frauds and scams in the banking system.
Warren's bill aims to expand Bank Secrecy Act requirements, including "know your customer" rules, to miners, validators and wallet providers. The bill has been met with pushback from some in the crypto industry who say it is unconstitutional and too broad in scope.
Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, also expressed concerns about cryptocurrencies and their use in scams during Thursday's hearing.
โAs we have seen in other hearings over the past three years, fraud and scams are not unique to consumer finance, they are also common in the cryptocurrency space,โ Brown said. "We will continue to push to make our financial system more secure, whether it's stopping rampant cryptocurrency fraud and scams or app and check fraud."
Brown, who would be instrumental in promoting cryptocurrency bills, recently said he is in talks about a bill that would target the use of digital assets for money laundering, according to political.
Other lawmakers are also working on cryptocurrency-related bills, including one led by House Republicans that takes a comprehensive approach to cryptocurrency market structure. Rep. French Hill, R-Ark., told reporters Monday that that bill would include an AML law. provision.
Stablecoins
Warren also criticized stablecoins during Thursday's hearing, stating that new data showed that stablecoins are used in the majority of illicit crypto transactions.
Stablecoins now account for the majority of all illicit transaction volume, according to a January report report from blockchain analysis firm Chainalysis.
"This change is also accompanied by the recent growth in the participation of stablecoins in all crypto activity in general, including legitimate activity. However, the dominance of stablecoins is not the case for all forms of crime based cryptocurrencies," according to that report.
Illicit cryptocurrency finances have also caught the attention of the Biden Administration. Wally Adeyemo, Undersecretary of the Treasury called He asked Congress late last year to give him more authority to go after illicit actors in the digital asset industry. Adeyemo specifically said that โdollar-backed stablecoin providersโ outside the US should not be able to use US currency without implementing procedures to prevent terrorists from taking advantage of their platform.
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