Sen. Elizabeth Warren, who has a fearsome repute as a monetary watchdog and the mind behind the Consumer Financial Protection Bureau, isn’t identified for agreeing with large financial institution CEOs. However on Wednesday, when the Senate banking committee held its annual oversight hearing with the heads of America’s greatest banks, the Massachusetts Democrat discovered herself on the identical web page as all eight of them.
“I am not usually holding hands with the CEOs of multibillion-dollar banks. But this is a matter of national security,” Warren stated.
The matter at hand was the best way to regulate cryptocurrency. Warren, a vocal crypto skeptic, took the chance to ask the CEOs of Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and different main banks whether or not crypto needs to be equally regulated.
“Do you think that crypto companies facilitating financial transactions should have to follow the same anti-money laundering rules that your bank has to follow?” Warren requested.
“Absolutely,” replied Wells Fargo CEO Charles Scharf. “Absolutely,” stated Financial institution of America’s Brian Moynihan. The opposite six CEOs echoed the assertion, prompting Warren to quip, “Alright, it’s the word of the day.”
JPMorgan’s Jamie Dimon went even additional. “If I were the government,” he added, “I would close it down,” suggesting that crypto has no software apart from legal exercise.
Warren has twice introduced a bill to incorporate know-your-customer guidelines to the crypto ecosystem, partly by requiring pockets suppliers and node operators to delve into their customers’ identities. The crypto business has decried the invoice as an assault on privateness, however supporters of regulation, which embrace the U.S. Treasury, be aware that digital currencies have been broadly adopted by criminals in addition to nations unfriendly to the U.S.
On Wednesday, Warren supplied a quick historical past of financial institution regulation as an argument for cracking down on crypto.
“Back in 1970, Congress passed the Bank Secrecy Act to make sure that banks don’t run a financial system that is open to terrorists and drug traffickers and rogue nations,” she stated.
Whereas that final was up to date after the September 11 terrorist assaults, Warren added, it has not modified since, and in her view is in determined want of a revamp as digital currencies’ recognition explodes.
“Today’s terrorists have a new way to get around the Bank Secrecy Act—cryptocurrency,” she stated. “Last year, an estimated $20 billion in illicit crypto transactions funded every kind of dangerous criminal. North Korea has funded at least half its missile program, including nuclear weapons, using the proceeds of crypto crime. And Israeli officials have confirmed that Hamas received millions of dollars through crypto transactions,” she stated.
The crypto business has disputed that final declare, saying that tales of Hamas crowdfunding through digital currencies have been overstated.
Final month, the Division of Justice introduced a $4.3 billion settlement with Binance, the world’s largest crypto trade, over criminal charges of money laundering.
The Treasury can also be trying to crack down on crypto shenanigans. Deputy Secretary Wally Adeyemo final month delivered a message to the Blockchain Affiliation, primarily telling the crypto business to eradicate dangerous actors or have regulators do it for them.
Addressing “those within the digital asset industry who believe they are above the law, those that willfully turn a blind eye to the law, and those that promote assets and services that aid criminals, terrorists, and rogue states,” Adeyemo stated, “we will find you and hold you accountable.”
