Progressive Senator Elizabeth Warren unveiled a bipartisan bill on Wednesday aimed at cracking down on money laundering through cryptocurrency, just two days after 30-year-old crypto billionaire Sam Bankman-Fried was arrested in the Bahamas.
The Massachusetts Democrat is joined by Republican Kansas Senator Roger Marshall.
Bankman-Fried, meanwhile, is sitting in a Bahamian prison that was flagged by the U.S. State Department in 2020 for its inhumane conditions.
His attorneys are trying to fight extradition to the U.S., where he is charged with eight counts including money laundering and fraud.
He was meant to appear in front of two Congressional hearings this week investigating the collapse of his multibillion-dollar company FTX and its sister company Alameda – and the loss of as much as $10 billion in client funds.
The company’s implosion, seemingly at the hands of its reckless executives, has spurred a renewed interest on Capitol Hill in regulating cryptocurrency, which has largely operated outside of the bounds of oversight thus far.
‘Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism,’ Warren said in a press release.
FTX founder Sam Bankman-Fried in Nassau at the Magistrates court leaving after being denied bail on Tuesday, December 13 in the Bahamas
‘The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions.’
She added that the bill would close ‘loopholes’ that allow for money laundering via cryptocurrency. Warren said its enforcement was a matter of ‘national security.’
In his own statement, Marshall also raised national security concerns by comparing the need for cryptocurrency regulations now to banking regulations imposed after the September 11 terror attacks to crack down on bad actors in the U.S. financial system.
‘Applying these similar policies to cryptocurrency exchanges will prevent digital assets from being abused to finance illegal activities without limiting law-abiding American citizens’ access,’ the Kansas Republican said.
‘Our common-sense bill will make it harder for criminals to finance their criminal activities, like the trafficking of illicit fentanyl through the dark web, that can harm innocent Kansans.’
The cryptocurrency exchange has been linked to the financing of terrorism, money laundering and a number of other crimes.
Russia, North Korea and Iran are among the nations the U.S. has accused of using the digital asset trade to evade international sanctions.
FTX, which was a giant in the increasingly-mainstream market, had been known for its young, brilliant founder in Bankman-Fried and for catching attention with an array of celebrity promoters, from movie stars to athletes.
Progressive Massachusetts Senator Elizabeth Warren is co-leading a bipartisan crackdown on cryptocurrency in the wake of FTX’s implosion
She’s joined by Republican Kansas Senator Roger Marshall, who said ‘Our common-sense bill will make it harder for criminals to finance their criminal activities, like the trafficking of illicit fentanyl through the dark web, that can harm innocent Kansans’
But the company and its employees have been accused of grossly misusing billions of dollars in client funds through risky bets that were against its own policy and a shocking lack of record-keeping.
John J Ray III, the company’s new CEO appointed to shepherd the company through bankruptcy, blamed the corporate destruction of FTX on the ‘absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals.’
Ray told lawmakers that of the dozen or so bankruptcies he’s navigated companies through, FTX sticks out as ‘highly unusual.’
‘Literally no record keeping whatsoever,’ he described the crypto giant.
Bankman-Fried, who was arrested on Monday night, is being kept in Fox Hill prison. A State Department report described conditions such as ‘overcrowding, poor nutrition, inadequate sanitation, poor ventilation, and inadequate medical care.’
He’s due to be kept there until his February extradition hearing, after a judge denied to release him on cash bail.
