Market News – The pressing need for crypto legislation has been underscored by recent events, where attacks financed by cryptocurrency have led to a renewed focus on regulatory measures.
Crypto Legislation – A Response to Hamas Funded Attacks
The recent attack in southern Israel, which reportedly led to the death of 1,200 Israelis, was partly financed with cryptocurrency. This has intensified the push for crypto legislation, a cause championed by Senator Elizabeth Warren and others.
Warren’s proposed law has met resistance from the Chamber of Digital Commerce due to fears that it could hinder innovation and market security. The law aims to broaden the anti-money laundering provisions of the Bank Secrecy Act (BSA) to encompass digital asset wallet providers, crypto miners, validators, and other network participants. The bill was not initially predicted to be passed this year. However, Hamas’ involvement in the attack could strengthen Warren’s case.
TD Cowen Analyst Foresees Bright Future for 2023 Crypto Regulation Bill
Jaret Seiberg, a TD Cowen analyst, stated in a research note that this significantly enhances the chances for the Digital Asset Anti-Money Laundering Act of 2023. He argued that it would be politically challenging for any legislator to oppose stricter AML/BSA regulations for crypto. The bill was introduced in July but has yet to make substantial progress towards committee approval.
Nonetheless, Senator Warren has used the news about Hamas to highlight the importance of her proposed actions.
Warren Calls for Crypto Regulation in Response to Hamas-Funded Attacks
In a post on X (previously known as Twitter), Warren expressed concern that digital wallets linked to Hamas received millions of dollars in cryptocurrencies. She insisted on the need to empower law enforcement agencies to tackle crimes financed by crypto. The bill is co-sponsored by Senator Joe Manchin (D-W.V.), who is known for his centrist stance on key legislative issues, as well as Republican Senators Roger Marshall (R-Kan.) and Lindsey Graham (R-S.C.).
Additional support for Warren came from Senator Dick Durbin (D-Ill.), Chairman of the Judiciary Committee, and Senator Gary Peters (D-Mich.), head of the Homeland Security panel. Despite having influential backers, the bill’s passage faces hurdles in the current Congress. Each party controls one chamber, there is no speaker in the House of Representatives, and government funding is set to expire on November 17.
However, another legislative proposal, a suggested amendment to the 2024 National Defense Authorization Act (NDAA), has addressed some of Warren’s money laundering concerns.