Trump Bitcoin policy is fuelling anxiety in the Democrats, and Elizabeth Warren crypto comments are now urging tightening of US crypto rules.
Elizabeth Warren is a warm glass of milk at best.
Yet it hasn’t stopped the Massachusetts Senator from striking back with a fresh demand for more onerous crypto regulations. Now, she aims her arguments at Scott Bessent, Trump’s pick for Treasury Secretary.
She called for stricter oversight in a January 12 letter, citing fears over money laundering and national security. The move sharpens the divide between crypto enthusiasts and wary policymakers.
Elizabeth Warren: Addressing Crypto Money Laundering
For Warren, the dark allure of crypto lies in its potential to clean illicit gains, power ransomware rings, and allegedly funnel support to North Korea’s nukes. The dark triad of crypto scams.
“Bad actors are also increasingly turning to cryptocurrency to enable money laundering, sanctions evasion, and to finance major national security threats,” Warren stated in the letter.
She further asked whether Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) frameworks should include risk-based provisions specifically targeting digital assets.
The point isn’t baseless—crypto’s pseudonymous nature has long made it a playground for shady dealings. Still, its surge in mainstream use raises a critical debate about striking the right regulatory balance.
Warren also proposed expanding the Bank Secrecy Act of 1970 to pull in foreign firms linked to U.S. markets. The goal would be to close financial loopholes, which she says bad actors have used to dodge oversight.
“Should AML/CFT and sanctions programs include risk-based provisions reasonably designed to prevent money laundering or terrorist financing involving digital assets?” she asked Bessent, urging him to prepare answers before his confirmation hearing on January 16.
Balancing Crypto Innovation vs US Regulation
Crypto critics say Warren’s crackdown risks choking innovation and sending crypto firms packing.
Alexander Grieve, Paradigm’s VP of government affairs, calls her open letter a smokescreen for stricter AML rules aimed at neutral tech providers, branding it a “casus belli” for more regulation.
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Yet, given the national security stakes, bipartisan interest may emerge. Her Digital Asset Anti-Money Laundering Act—despised by much of the crypto world—stands as a precedent.
Is the Industry at a Turning Point?
The timing of Elizabeth Warren’s letter is no accident. Trump’s administration stands ready to roll out crypto-friendly policies, bolstered by a Congress packed with blockchain supporters.
This clash of forces pits regulation against innovation in a high-stakes standoff that could define the industry for years. Whether Warren’s agenda finds footing or fizzles out, her proposals intensify an impossible-to-ignore debate.
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