Massachusetts Senator Elizabeth Warren is once again taking aim at the cryptocurrency industry, this time by introducing a bill that would ban most forms of self-custody wallets and impose strict anti-money laundering requirements on crypto businesses. 
The Digital Assets Anti-Money Laundering Act, co-sponsored by Republican Senator Roger Marshall of Kansas, was first introduced in December 2022. It seeks to close what Warren calls “digital asset loopholes” that pose national security risks by allowing criminals and terrorists to use crypto for illicit purposes. 
Under the proposed legislation, all crypto wallet service providers, miners, validators, and other network users would have to register as money service businesses with the Financial Crimes Enforcement Network (FinCEN) and adopt anti-money laundering (AML) policies. It would also prohibit the use of digital asset mixers, which are services that obscure the origin and destination of crypto transactions. 
One of the most controversial aspects of the bill is that it would effectively outlaw non-custodial wallets, which are software or hardware devices that allow users to store and control their own crypto without relying on third-party intermediaries. These wallets are widely seen as a way to enhance privacy and security in the crypto space, but Warren argues that they also facilitate money laundering and tax evasion. 
Warren’s bill comes at a time when the crypto industry is facing increased scrutiny and regulation from lawmakers and regulators. In February, federal prosecutors charged Sam Bankman-Fried, the former CEO of FTX, a major crypto exchange, with fraud and money laundering for allegedly operating an unregistered securities offering and lending customer funds to a hedge fund without their consent. 
Warren, who is a vocal critic of crypto and its environmental and social impacts, said that she is working in a bipartisan manner to pass common-sense crypto legislation to better safeguard U.S. national security. She also said that she wants to protect consumers from scams and prevent Wall Street from dominating the crypto market. 
However, some crypto advocates and experts have criticized Warren’s bill as being too harsh and misguided. They argue that the bill would stifle innovation, drive crypto businesses overseas, and weaken consumer choice. They also point out that crypto is not the main method of choice for money launderers, who still prefer cash and other conventional currencies. 
The bill is unlikely to pass in the current Congress due to time constraints, but it could be reintroduced in the next session. It remains to be seen how much support it will garner from other senators and whether it will face opposition from the crypto industry and its allies.
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Elizabeth Warren is pushing the Senate to ban your crypto wallet
Elizabeth Warren is back with an Anti-Money Laundering act that would — among other things — make it mostly illegal for you to use your own crypto wallet.
Elizabeth Warren is pushing the Senate to ban your crypto wallet
Massachusetts Senator Elizabeth Warren is once again smearing the cryptocurrency industry and attempting to make Americans more dependent on big banks.
Elizabeth Warren is urging the Senate to ban your crypto wallet
Massachusetts Senator Elizabeth Warren is again smearing the cryptocurrency industry and trying to make Americans more dependent on big banks.