Key Takeaways
- Elizabeth Warren suggests expanding numerous government powers to cover U.S-tied crypto companies and stablecoins.
- Warren’s concerns on illegal crypto misuse are aimed at Scott Bessent, who has taken over as U.S. Treasury Secretary.
- Warren has questioned if secondary sanction tools that can “cut” crypto firms from U.S. relations could be implemented.
Massachusetts Senator Elizabeth Warren has urged incoming U.S. Treasury Secretary Scott Bessent to impose tighter regulations on crypto to combat illicit activities and questions if stablecoins should fall under the Office of Foreign Assets Control (OFAC).
Her letter comes ahead of Bessent’s confirmation hearing on Jan. 16, 2025. Warren has urged the incoming Treasury head to be ready to address the questions.
Illicit Crypto
According to Warren’s open 31-page letter, which reads more like a questionnaire, she asks if Bessent could expand the Treasury’s anti-money laundering (AML), counter-terrorism finance (CFT), and sanctions programs to include “risk-based provisions.”
Warren cautions about the increasing use of crypto to evade sanctions, funnel illicit gains and ransomware attacks, and fund North Korea’s nuclear ambition.
Also, naming Russia and China as entities leveraging crypto to fund war efforts, weapons sales, and drug sales, she asks if AML/CFT should have a secondary tool to cut off “fintech and crypto operators” from their U.S. partners and relations.
Furthermore, she has suggested amending the Bank Secrecy Act (BSA) to have a new crypto-related category of “financial institution.” This would include exchanges, decentralized finance (DeFi), unhosted wallets, and blockchain validators.
Stablecoins
Interestingly, Warren asks if OFAC should have jurisdiction over dollar-denominated stablecoins.
She asks if the BSA could be further expanded to include international entities providing services or connected to U.S. companies, clients, and markets.
This follows developments from the U.S. Consumer Financial Protection Bureau (CFPB), which has sought input on how to enhance privacy protections and prevent “harmful surveillance in digital payments.”
As stablecoins stand a good chance of being used in everyday payments, the CFPB wants to understand how “longstanding” protections can be applied to new payment tools.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
