The revelation that the recent attack in southern Israel, which allegedly resulted in the deaths of 1,200 Israelis, was partially funded with cryptocurrency has added fuel to the efforts led by Senator Elizabeth Warren and others to advocate for crypto legislation.
Warren’s proposed bill, which has faced opposition from the Chamber of Digital Commerce due to concerns about stifling innovation and market security, seeks to expand anti-money laundering requirements outlined in the Bank Secrecy Act (BSA) to include digital asset wallet providers, crypto miners, validators, and other network participants.
While the bill was not initially expected to pass this year, the involvement of Hamas in the attack could bolster Warren’s argument.
“We believe this materially improves prospects for the Digital Asset Anti-Money Laundering Act of 2023 as it makes it politically difficult for any lawmaker to stand in the way of tougher AML/BSA for crypto,” Jaret Seiberg, an analyst at TD Cowen, said in a research note.
Although the legislation was introduced in July, it has not yet made significant progress toward committee approval.
However, Senator Warren has seized on the Hamas news to underscore the urgency of her proposed measures.
In a post on X (formerly Twitter), Warren said it is “alarming and should be a wakeup call for lawmakers and regulators that digital wallets connected to Hamas received millions of dollars in cryptocurrencies.”
Warren argued that it is crucial to equip law enforcement agencies with the necessary powers to combat crypto-financed crimes.
The bill was co-sponsored by Senator Joe Manchin (D-W.V.), known for occupying a centrist position on important legislative matters, as well as Republican Senators Roger Marshall (R-Kan.) and Lindsey Graham (R-S.C.).
Warren later garnered additional support from Senator Dick Durbin (D-Ill.), Chairman of the Judiciary Committee, and Senator Gary Peters (D-Mich.), who leads the Homeland Security panel.
While the bill boasts influential supporters, its passage faces challenges in the current Congress, where each party controls one chamber, the House of Representatives is without a speaker, and government funding expires on November 17.
Nonetheless, some of Warren’s concerns regarding money laundering have been addressed in another legislative proposal, a proposed amendment to the 2024 National Defense Authorization Act (NDAA).
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