Michaela Alvez
U.S. Senator Elizabeth Warren has sent an open letter to Scott Bessent, nominee for Treasury Secretary, calling for stricter regulations and enforcement measures for digital assets before his confirmation hearing with the Senate Finance Committee.
In a comprehensive 31-page letter dated January 12, Senator Warren raised several concerns regarding Bessent’s views on cryptocurrency regulation, financial deregulation, tax policies, and the challenges confronting smaller banks.
Warren raised concerns about whether the Treasury’s Office of Foreign Assets Control (OFAC) should have the authority to regulate stablecoins to address risks such as money laundering and sanctions evasion.
“Should AML/CFT and sanctions programs include risk-based provisions reasonably designed to prevent money laundering or terrorist financing involving digital assets,” Warren wrote.
Senator Warren argued that bad actors are exploiting cryptocurrency for illegal activities, including money laundering, sanctions evasion, and financing dangerous actions like North Korea’s nuclear program and ransomware attacks.
“Bad actors are also increasingly turning to cryptocurrency to enable money laundering, sanctions evasion, and to finance major national security threats, such as Russia’s invasion of Ukraine, North Korea’s nuclear program, China’s sale of weapons parts to sanctioned nations, and ransomware attacks,” Warren added.
Additionally, she inquired if the Treasury Department’s powers in combating money laundering and terrorism financing should be expanded to include a secondary sanctions tool, enabling the severing of relationships between U.S. entities and fintech or crypto operators involved in illicit activities.
The Senator raised questions about whether the OFAC should be given jurisdiction over stablecoins, and whether Congress should broaden the Treasury’s Bank Secrecy Act (BSA) authority to cover international companies linked to U.S. markets and clients.
The Bank Secrecy Act mandates that financial institutions keep detailed operational records and submit reports to the U.S. Department of the Treasury.
U.S. regulations require crypto exchanges, wallet providers, and other related services to adhere to specific BSA provisions if they are involved in activities such as trading, transferring, or storing digital assets.
In her letter, Warren also scrutinized Bessent’s backing of the 2017 tax cuts under the Trump administration, questioning his “3-3-3” strategy, which advocates for tax reductions, deficit cuts, and economic growth stimulation.
She pressed Bessent for clear details on his plans to enforce the Corporate Alternative Minimum Tax (CAMT) and close the carried interest loophole. She urged him to be ready to address the questions in her letter during his confirmation hearing scheduled for January 16.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
