Banking Committee Chair: US Regulators Should ‘Maybe’ Ban Crypto

The senator [Sherrod Brown] also pointed to numerous incidents to back up his claims, not just the recent collapse of FTX but also issues such as “the threat to national security from Korean cyber criminals to drug trafficking and human trafficking and financing of terrorism and all the things that can come out of crypto.”

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Senator Elizabeth Warren unveiled a new bill governing cryptocurrencies earlier this month, dubbed the Digital Asset Anti-Money Laundering Act.

Warren’s bill would look to force crypto asset providers to offer audited financial statements and impose bank-like capital requirements more in line with what is expected of traditional financial institutions. The act would also give the SEC increased powers to regulate the asset class.

Get ready for the Digital Dollar!

Related:

What is AML and Will the ‘Digital Asset Anti-Money Laundering Act of 2022’ Help?

According to blockchain analysis firm Chainalysis’s “Crypto Crime Trends for 2022” report, while illicit transaction activity reached an all-time high of $14 billion in the year 2021, its share of all cryptocurrency activity fell to an all-time low.

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However, governments are still struggling to decide how to regulate Bitcoin and its ilk. Many of these policymakers are not well-versed in digital assets and either completely misunderstand them or are knowingly blowing the concerns around them out of proportion.

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This bill aims to effectively outlaw self-custody of digital assets, which can prevent consumers from the kind of counterparty risks they were exposed to in the FTX collapse. It basically forbids cryptocurrency users from having control over their own assets.

Elizabeth Warren’s Crypto Bill Targets Financial Freedom, Not Fraud

“The bill first seeks to classify self‐hosted wallets as money service businesses,” cautions the Cato Institute’s Nicholas Anthony. “For those unfamiliar, self‐hosted wallets are merely the digital equivalent of a wallet in your pocket or purse. … Where much of the financial surveillance in the United States depends on what’s known as the third‐party doctrine, self‐hosted wallets offer individuals protection from government surveillance and censorship. Yet Senator Warren’s bill would put an end to that protection.”

The bill, says Anthony, would “classify cryptocurrency miners, validators, and network participants as money service businesses.” It “also sets its sights on cryptocurrency mixers” who “offer individuals the opportunity to enhance their privacy when using cryptocurrencies on public blockchains.”

In fact, the bill’s language specifies that “the Secretary of the Treasury shall promulgate a rule that prohibits financial institutions from … handling, using, or transacting business with digital asset mixers, privacy coins, and other anonymity-enhancing technologies.”

According to the below article, the Digital Asset Anti-Money Laundering Act of 2022 infringes on the First Amendment, the Fair Credit Reporting Act, the California Privacy Act, US Constitution’s Privileges and Immunities Clause, the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the Right to Financial Privacy Act, and possibly the Fourth Amendment.

Sen. Warren’s Unconstitutional Crypto Bill

It can be suggested that Sen. Warren spends less time attempting to regulate technology that she clearly does not understand and more time learning about existing financial regulations. She would further be well advised in refraining from attempting to violate her constituents’ constitutional rights and instead put her effort toward protecting them. After all, that’s what we pay her for.

Digital Dollar