Senators delay crypto anti-money laundering bill to attract co-sponsors

Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) have postponed reintroducing their cryptocurrency anti-money laundering legislation to attract more cosponsors, as reported by two sources familiar with the situation. Initially introduced in the Senate in December during the previous session, the bill aims to enforce know-your-customer (KYC) regulations on the crypto industry, including individual miners and validators.

Expected revamped bill delayed

Although industry members anticipated a revised version of the bill to be presented this week, insiders stated that the senators have deferred the reintroduction to secure additional cosponsors. The bill’s latest version, which has not been made public, retains the same language opponents initially found problematic.

Under the proposed legislation, the following groups must comply with KYC guidelines: “unhosted wallet providers, digital asset miners, validators, or other nodes that may act to validate or secure third-party transactions, independent network participants, including maximal extractable value searchers, miner extractable value searchers, and other validators or network participants with control over network protocols,” as per the documents.

Addressing heightened concerns over crypto crime

In early 2023, Warren announced that the bill would resurface amid increasing concerns about hacks and illicit actors abroad. “Roger Marshall and I are reintroducing our anti-money laundering bill to clamp down on crypto crime and give regulators the tools they need to stop the flow of crypto to drug traffickers and places like North Korea,” Warren said during a Senate Banking Committee hearing in February.

Critics of the bill argue that it overreaches and imposes unrealistic expectations on the industry. The Chamber of Digital Commerce, a crypto advocacy group, claimed earlier this week that the demands placed on the industry are unattainable. In a statement, the Chamber of Digital Commerce said the proposed legislation “aims to eradicate digital asset innovation from the United States at the expense of market security by imposing impractical and unworkable compliance burdens on industry participants.”