Elizabeth Warren Conspires with the SEC to Restrict Crypto in the USA!

Senator Elizabeth Warren has introduced a bill that would impose strict regulations on the crypto industry. While the bill aims to combat money laundering, it raises concerns about its potential impact on innovation and privacy.

Key Provisions of the Anti-Money Laundering Bill

Introduced in July 2023, Senator Warren’s bill is still in a preliminary stage. It must pass a Senate vote and then go to the House before any final adoption. Nonetheless, if it were to be enacted, it would greatly affect the crypto industry by extending regulatory oversight to various service providers.

Senator Elizabeth Warren, known for her critical stance on cryptos, proposes to subject crypto service providers to the same compliance obligations as traditional banks. 

More specifically, her proposed bill would treat a wide range of actors (unhosted wallet providers, miners, validators, etc.) as regulated financial institutions. They would have to comply with anti-money laundering due diligence, keep detailed records of transactions, and perform systematic identification of customers.

Warren justifies this legislation by arguing that it is necessary to combat the illicit use of cryptos for criminal purposes, citing evidence that countries like North Korea use these assets to fund weaponry programs and evade international sanctions.

However, some experts fear the excessive impact of this regulatory tightening, which could hinder DeFi innovation. Grant Fondo, co-chair of Goodwin’s Digital Currency and Blockchain department, stated that this law “would kill decentralized finance in the United States”. Imposing banking requirements on decentralized protocols would be unrealistic, according to him.

Despite these warnings, the bill has support within both major American parties. Alongside Ms. Warren, several notable senators such as Joe Manchin are thus advocating for regulating this digital Wild West.

Mixed Reactions from the Crypto Industry

Nevertheless, the proposed bill is already causing controversy. Lawyer John Deaton accuses Senator Warren of violating her oath as a member of the Senate Banking Committee by coordinating her actions with SEC Chairman Gary Gensler against the crypto industry. This alleged alliance adds complexity to the case.

Moreover, despite some bipartisan support, the final adoption of the text is not assured. With a deeply divided Congress and crucial midterm elections, regulation seen as hostile to cryptocurrencies could face roadblocks.

The American crypto sector, already tested by the SEC’s recurring offensives, sees in this law a new severe blow that could hinder innovation. The most innovative companies in decentralized financial technology could seek to leave American territory for more lenient regulatory skies, such as in Hong Kong.