The recent attack in southern Israel, claiming around 1,200 Israeli lives, is believed to have been partially financed using cryptocurrency. This has intensified the push for crypto legislation, notably by Senator Elizabeth Warren.
Senator Warren’s proposed legislation, which the Chamber of Digital Commerce has criticized over fears it might hamper innovation and market security, aims to broaden the anti-money laundering stipulations in the Bank Secrecy Act (BSA). This would bring digital asset wallet providers, cryptocurrency miners, validators, and other participants in the crypto ecosystem under its purview.
Despite initial predictions that the bill might not gain traction this year, Hamas’s alleged involvement in the attack might strengthen Senator Warren’s case.
Jaret Seiberg, an analyst at TD Cowen, noted, “Given the circumstances, the chances for the Digital Asset Anti-Money Laundering Act of 2023 to pass have notably increased. It would be challenging politically for any legislator to oppose stricter AML/BSA measures for the crypto sector.”
Introduced in July, the legislation has yet to make substantial headway towards gaining committee endorsement.
Nonetheless, the recent events involving Hamas have provided Senator Warren with an opportunity to emphasize the pressing need for her proposed regulations.
Posting on X (previously known as Twitter), Warren expressed her concerns, stating it’s “disturbing and a clear signal to legislators and regulatory bodies that Hamas-affiliated digital wallets amassed millions in cryptocurrencies.”
She stressed the imperative of empowering law enforcement with the right tools to tackle criminal activities financed through cryptocurrency.
The legislation was jointly introduced by Senator Joe Manchin (D-W.V.), who is often recognized for his moderate stance on key legislative issues. Republican Senators Roger Marshall (R-Kan.) and Lindsey Graham (R-S.C.) also endorsed the bill.
Subsequently, Warren secured backing from Senator Dick Durbin (D-Ill.), the Judiciary Committee’s Chair, and Senator Gary Peters (D-Mich.), the head of the Homeland Security Committee.
Although the proposal has the backing of powerful figures, its journey through the current Congress appears complex. With each political party dominating one legislative house, a vacant Speaker’s position in the House of Representatives, and looming government funding expiration on November 17, the bill’s approval might be tumultuous.
However, there’s a silver lining: a portion of Warren’s apprehensions about money laundering have been addressed in a separate legislative initiative—an amendment proposal for the 2024 National Defense Authorization Act (NDAA).