Senator Elizabeth Warren Wants Next US Treasury Secretary to Have Strict Crypto Regulations

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In more casual terms, U.S. Senator Elizabeth Warren, who is known for her skepticism towards cryptocurrencies, penned a letter to Scott Bessent – Trump’s newly appointed Treasury chief – urging him to think about tightening crypto regulations and enforcing measures once he assumes office.

On January 12, Senator Warren posed a query in an open letter concerning whether the U.S. Treasury Department possesses greater authority to regulate the cryptocurrency sector. The senator, who is set to hold a prominent position at the Senate Banking, Housing and Urban Affairs Committee, expressed this question: “Does the Treasury Department have expanded powers to oversee and potentially impose sanctions on the crypto industry?

Would it be appropriate for Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and sanctions programs to incorporate risk-based measures that effectively minimize the likelihood of digital assets being used for money laundering, terrorism financing or breaching sanctions?

It’s said that Senator Warren played a significant role in the development of Operation Choke Point 2.0 and restricting the financial ties between conventional banks and the cryptocurrency sector. Moreover, she is attributed to the aggressive scrutiny on banking institutions supportive of cryptocurrencies, such as Silvergate, leading ultimately to their bankruptcy filing.

Senator Elizabeth Warren contends that unscrupulous individuals have abused the cryptocurrency system by engaging in illegal activities like money laundering, violating sanctions, financing North Korea’s nuclear projects, and aiding ransomware assaults. Furthermore, she stated:

Criminal elements are increasingly utilizing cryptocurrencies for activities like money laundering, circumventing sanctions, funding dangerous situations such as Russia’s invasion of Ukraine, North Korea’s nuclear program, China’s arms sales to embargoed countries, and cyberattacks including ransomware.

Senator Elizabeth Warren Demands Jurisdiction Over Stablecoins

Senator Warren voiced doubts about whether Treasury Secretary Bessent should broaden the department’s authority in combating Money Laundering and Counter-Terrorism Financing activities. Additionally, she expressed interest in developing an alternative sanctions mechanism that could cut off American financial ties with operators in fintech and cryptocurrency sectors.

The senator who is against cryptocurrency has also questioned if the Office of Foreign Assets Control (OFAC) should have the appropriate power to regulate stablecoins. She proposes that Congress should think about expanding the Bank Secrecy Act (BSA) authority of the Treasury Department, which would allow it to oversee foreign companies operating within U.S. markets or serving U.S. clients.

At present, the Bank Secrecy Act (BSA) enforces that financial entities preserve their transactional records and submit reports to the U.S. Department of the Treasury. Consequently, all American cryptocurrency trading platforms, digital wallet services, and other related providers are obligated to comply with BSA regulations.

On January 13, Alexander Grieve, the vice president of government affairs at crypto investment firm Paradigm, expressed his views on topic X. Recognizing that the inquiries appear justifiable, Grieve posited that these queries could potentially align with Senator Warren’s broader strategy.

Warren’s reason for pushing for expanded Anti-Money Laundering (AML) regulations against neutral cryptocurrency providers could be hidden behind their actions, providing a potential cause for conflict. As Ranking Member, this is a strong opening move by Warren. Be prepared for Sen. Warren to be very involved during the minority period.

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2025-01-14 14:15