US Senator Elizabeth Warren stated any new crypto regulation, together with the newly proposed regulatory framework for the stablecoin market, should embrace the complete suite of anti-money laundering authorities that the Treasury Division requested in November 2023.
In an April 16 letter addressed to US Treasury Secretary Janet Yellen, Senator Warren articulated her stance and advocated for the extension of Anti-Cash Laundering/Combating the Financing of Terrorism (AML/CFT) obligations to cowl miners, validators, and DeFi intermediaries alongside stablecoin issuers.
Warren’s argument
In accordance with her, any regulatory frameworks for stablecoins would fold the sector “deeper into the banking system [and] will supercharge buying and selling within the crypto market, exploding the alternatives for terrorists and different dangerous actors to take advantage of these financing channels to each evade sanctions and obtain a limitless stream of untraceable earnings.”
Senator Warren additional emphasised cryptocurrencies’ perceived nationwide safety threats, citing Treasury Deputy Secretary Adewale Adeyemo‘s current testimony earlier than Congress.
She highlighted situations the place terrorist entities like Hamas reportedly exploit blockchain applied sciences for his or her fundraising and claimed that the closely sanctioned nation Iran, as an illustration, derives substantial income from validating blockchain transactions and mining Bitcoin.
Consequently, she argued that “excluding miners, validators, and different middleman nodes within the DeFi system from the stablecoin laws’s AML/CFT necessities would enable dangerous actors to revenue from the rise in crypto buying and selling that stablecoin laws would supply.”
Warren added:
“Any laws that enhances the attractiveness of crypto to extraordinary crypto merchants will multiply money-making alternatives for sanctioned entities like Iran and the prison underground.”
Crypto group reacts
Warren’s newest missive on the rising trade has drawn a number of reactions from crypto stakeholders.
Custodia Financial institution CEO and founder Caitlin Lengthy stated Warren’s letter utterly missed the chance to the banking system and urged the lawmaker to “take into account consulting somebody who really de-risked a big financial institution, as a substitute of blindly spewing speaking factors.”
Equally, a pro-crypto candidate gunning for Warren’s Senate seat, John Deaton, opined that the letter additional exhibits that she “is working onerous on behalf of the banking trade.”
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