Senator Elizabeth Warren called on incoming US Treasury Secretary Scott Bessent to consider expanding regulatory powers over crypto.
Elizabeth Warren, the anti-crypto US Senator from Massachusetts, wrote a letter to Scott Bessent, the recent pick by Donald Trump to lead the US Treasury, asking him to consider stricter crypto regulations and other enforcement measures when he takes office.
In an open letter submitted on January 12, Senator Warren asked if the Treasury Department has more power to sanction the crypto industry. Warren, who will soon be a top Democrat at the Senate Banking, Housing and Urban Affairs Committee, said:
“Should AML/CFT and sanctions programs include risk-based provisions reasonably designed to prevent money laundering or terrorist financing involving digital assets”.
Senator Warren was reportedly instrumental in Operation Choke Point 2.0 and cutting down the flow of money from traditional banks to the crypto industry. She was also responsible for unwarranted crackdowns on crypto-friendly banks like Silvergate, which moved into bankruptcy.
Senator Elizabeth Warren claims that bad actors have exploited the cryptocurrency through illicit activities such as money laundering, sanctions evasion, funding North Korea’s nuclear program, and facilitating ransomware attacks. She added:
“Bad actors are also increasingly turning to cryptocurrency to enable money laundering, sanctions evasion, and to finance major national security threats, such as Russia’s invasion of Ukraine, North Korea’s nuclear program, China’s sale of weapons parts to sanctioned nations, and ransomware attacks.”
Senator Warren questioned whether Treasury Secretary Scott Bessent should expand the department’s Anti-Money Laundering and Counter-Terrorism Financing powers. She also wrote about having a secondary sanctions tool that will enable the severance of fintech and cryptocurrency operators from US financial relationships.
The anti-crypto senator has also inquired whether the Office of Foreign Assets Control (OFAC) should have proper jurisdiction over stablecoins. She suggested that Congress consider extending Treasury’s Bank Secrecy Act (BSA) authority in order to cover overseas companies operating within US markets or serving US clients.
Currently, the BSA makes it mandatory for financial institutions to retain operational records and submit reports to the Treasury Department. As a result, all US-based cryptocurrency exchanges, wallet providers, and other service providers have to adhere to BSA requirements.
On January 13, Alexander Grieve, vice president of government affairs at crypto investment firm Paradigm, shared his thoughts on X. While acknowledging that the “questions seem entirely reasonable to ask”, Grieve suggested they might be part of a broader agenda pursued by Senator Warren.
“What they mask is a casus belli for Warren to argue for significant AML reg expansion over neutral crypto technology providers. As an opening salvo as Ranking Member, this is a pretty robust one. Expect Sen. Warren to be very active in the minority,” he added.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
