Senator Elizabeth Warren, a prominent US lawmaker, has advised the incoming Treasury Secretary, Scott Bessent, to consider implementing stricter regulatory and enforcement policies towards digital assets. In an open letter, Senator Warren suggested the Treasury Department should have augmented powers to regulate and impose sanctions on the crypto sector. She emphasized that cryptocurrencies are increasingly being used to facilitate illegal activities such as money laundering, sanctions evasion, and the funding of security threats.
Warren raised queries on possible measures such as allowing the department access to Anti-Money Laundering and Counter-Terrorism Financing tools. The objective of these tools is to disconnect digital financial and crypto firms with US affiliations. She enquired further on regulation expansion to cover stablecoins and overseas businesses linked to the US market.
The current regulatory framework requires US crypto exchange platforms, digital wallet providers, and related service firms to comply with certain requisites, including operational records maintenance and reporting to the Department of the Treasury. The anticipated confirmation hearing of proposed Treasury Secretary Bessent is slated for January 16.
Despite the seemingly logical nature of these questions, Alexander Grieve, VP of government affairs at crypto investment firm Paradigm, suspects Senator Warren may be initiating a broader plan to significantly drive regulatory expansion in the crypto space.
It’s worth noting that Senator Warren has been a vocal advocate for stricter regulations for the crypto industry, proposing the Digital Asset anti-Money Laundering Act previously. On the other hand, the incoming administration, due to commence on January 20, brings the promise of being the most crypto-friendly government in history, indicated by the high number of pro-crypto candidates securing Congress seats.