Sen. Elizabeth Warren is planning to reintroduce her bill -- the Digital Asset Anti-Money Laundering Act (DAAMLA) -- with the aim of tackling money laundering, terrorist financing and other national security risks associated with the use of cryptocurrency. The DAAMLA was first proposed late last year, and it is designed to ensure compliance with existing anti-money laundering laws as well as to combat terrorism financing.

The bill seeks to prevent financial institutions from utilizing digital asset mixers--tools used to group together cryptocurrencies from different users so as to obscure the sources of the funds. It further extends know-your-customer requirements to various types of cryptocurrency sector, including miners.

At a Senate Armed Services Committee hearing on Thursday, Warren highlighted the vulnerabilities of using crypto for financing illicit activities. She posed the question of National Security risk to the Defense Intelligence Agency Director, Scott Berrier, on the issue of North Korea’s crypto money laundering. WARREN: “When North Korea launders billions of dollars worth of crypto and funnels it into its nuclear program, does that threaten our national security?” Berrier responded in the affirmative, highlighting the threat posed by Pyongyang’s use of cryptocurrency to generate funds for its nuclear programs.

The senator unambiguously revealed her understanding of how cryptocurrency has become a tool for criminals to abuse, calling it “an industry that is built to favor scammers.” Warren believes that the big investors are driven to “vampire-sucking money out of crypto projects that scam mom-and-pop investors”. Warren’s view was made clear during last summer's congressional hearing.

The reintroduction of the DAAMLA is an indication that lawmakers do not intend to let the negative aspects of cryptocurrency overshadow its potential as an innovative payment system. The reintroduction of this legislation makes it easier for regulatory bodies to investigate criminal activities that involve the use of cryptocurrency. As such it goes a long way in addressing the risks associated with criminality in the crypto and blockchain industry.



Other News from Today