Senator Elizabeth Warren Wants Stricter Crypto Regulations Amid National Security Concerns
US Senator Elizabeth Warren has announced a public appeal for more regulatory measures focused on the cryptocurrency business. Warren urged President-elect Donald Trump’s Treasury Secretary-designate, Scott Bessent, to consider expanding the Treasury Department’s authority to implement stricter Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations.
Warren expressed concerns in her letter on Jan. 12 about the misuse of digital assets by malicious actors. She further cited North Korea’s nuclear program, Russia’s invasion of Ukraine, and ransomware attacks as examples of how cryptocurrencies are increasingly being used to evade sanctions and launder money.
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“Should AML/CFT and sanctions programs include risk-based provisions reasonably designed to prevent money laundering or terrorist financing involving digital assets,” wrote Warren, soon to be the top Democrat on the Senate Banking, Housing, and Urban Affairs Committee.
Warren also indicated the role of better compliance with the Bank Secrecy Act (BSA), which compels financial institutions to keep operating records and report unusual activity. To strengthen regulatory implementation, She urged expanding BSA power to include global firms with US clientele, ensuring that no company escapes regulatory scrutiny. She has also inquired if the Office of Foreign Assets Control should have jurisdiction over stablecoins.
Crypto Community Responds to Elizabeth Warren Regulatory Implementation
The crypto community has responded with uncertainty and they have mixed opinions. Some accuse Warren of using national security concerns as a pretext to push for wider regulatory measures. Alexander Grieve, vice president of government affairs at Paradigm, a crypto investment firm, described Warren’s letter as a veiled attempt to justify expanding regulations over neutral crypto technology providers.
Grieve acknowledged that Warren’s letter posed reasonable questions but warned that they might signal a more aggressive legislative agenda.
A History of Advocacy Against Crypto
Warren’s desire for strict cryptocurrency regulation is not new. In 2022 and 2023, she introduced the Digital Asset Anti-Money Laundering Act, which aimed to bring the cryptocurrency sector under existing AML and CTF standards. Critics including the Chamber of Digital Commerce and more than 80 former military and national security officials claimed that the plan would unintentionally hurt law enforcement efforts and may drive innovation globally.
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A Pro-Crypto Administration
Warren’s request for greater control comes as Trump’s new administration will take a more crypto-friendly approach. With hundreds of pro-crypto candidates recently voted to Congress, the industry predicts a more favorable regulatory climate. However, Warren’s position as the senior Democrat on the Senate Banking, Housing, and Urban Affairs Committee predicts that the sector will face considerable challenges in the future.
As Bessent prepares for his confirmation hearing, the cryptocurrency business faces an uncertain regulatory environment. Though the crypto industry has positive views about Trump’s pro-crypto promises, Warren’s call for stricter regulations reflects the market struggle between innovation and regulation.
The future initiatives proposed by the Treasury Department and Congress will influence the future of cryptocurrencies in the United States, and establish a balance between supporting innovation and maintaining national security.
