The proposed bill by Elizabeth Warren would require digital asset mixers, self-hosted wallets, miners, and validators to implement Anti-Money Laundering policies. However, this could potentially reduce consumer choice and prompt cryptocurrency businesses to move overseas due to an excessive regulatory burden. Additionally, the bill mandates platforms to collect personal user information without a warrant or probable cause, which could negatively impact decentralized finance (DeFi).
The bill's classification of all miners, even those who mine for personal use, as money service businesses, and its demand for software companies to register as money service providers is illogical. Additionally, it is important to note that blockchain and related technologies are not synonymous with cryptocurrency, and not all cryptocurrencies are openly tradable or usable for purchases.
If implemented, Warren's proposed bill could force many cryptocurrency businesses to either shut down or relocate, leading to reduced competition in banking and other financial services. This could ultimately result in higher prices for consumers. Additionally, the bill's provisions could drive legitimate users and businesses away and push the industry underground, ultimately contributing to an increase in criminal activity.
The proposed Digital Assets Anti-Money Laundering Act by Senator Elizabeth Warren could have a negative impact on the cryptocurrency industry in the United States. The bill mandates digital asset mixers, self-hosted wallets, miners, and validators to adopt Anti-Money Laundering policies and requires personal user information to be submitted to the government without warrant or probable cause. These requirements could lead to reduced competition, increased consumer prices, and force legitimate businesses and users underground. Additionally, the bill's broad definitions of "money service businesses" and "software developers" could potentially harm the industry.
In contrast, other countries, such as the European Union and the United Kingdom, have taken a more moderate approach, only requiring hosted wallets to submit information for every transaction and reporting transactions with risk factors, respectively. Lawmakers should prioritize promoting the public good without overly burdening an entire industry.