Sen.
Elizabeth
Warren
(D–Mass.)
is
trying
to
force
feed
the
American
people
a
poison
pill.
The
high-profile
legislator,
known
today
as
much
for
her
disdain
of
cryptocurrency
as
for
Big
Banks,
has
submitted
a
bill
for
consideration
looking
to
crackdown
on
crypto’s
alleged
use
in
illicit
finance.
This
is
an
excerpt
from
The
Node
newsletter,
a
daily
roundup
of
the
most
pivotal
crypto
news
on
CoinDesk
and
beyond.
You
can
subscribe
to
get
the
full
newsletter
here.
On
Monday,
five
Democratic
lawmakers
joined
to
co-sponsor
the
so-called
“Digital
Asset
Anti-Money
Laundering
Act.”
If
passed,
the
law
would
extend
Bank
Secrecy
Act
requirements
including
know-your-customer
(KYC)
rules
to
miners,
validators,
wallet
providers
and
other
crypto
industry
actors.
Three
of
the
five
new
sign-ons
are
colleagues
of
Warren
on
the
Senate
Banking
Committee.
They
are:
Sens.
Raphael
Warnock
(D-GA),
Laphonza
Butler
(D-CA)
and
Chris
Van
Hollen
(D-MD).
The
committee
is
a
powerful
body
in
the
Senate,
responsible
for
passing
laws
that
regulate
one
of
the
U.S.
largest
economic
sectors
and
that
will
likely
influence
what
legislative
proposals
will
be
considered
next
year.
That
said,
Warren’s
bill,
as
it
exists,
is
unlikely
to
pass
for
many
of
the
same
reasons
U.S.
governance
is
often
hamstrung:
partisan
politics,
infighting
and
gridlock.
And
that
is
a
good
thing,
not
only
for
the
crypto
industry
—
where
many
leaders
have
already
come
out
forcefully
against
the
bill
—
but
for
the
American
public.
The
anti-money
laundering
act,
while
likely
conceived
with
the
best
intentions,
comes
with
some
truly
worrisome
conditions
attached.
Much
ink
has
already
been
spilled
over
the
bill,
so
I
won’t
rehash
much
of
the
debate
other
than
saying
Warren’s
bill
essentially
would
make
it
illegal
to
use
crypto
in
the
U.S.
and
put
severe
restrictions
around
writing
code
meant
to
provide
people
with
similar
privacy
guarantees
as
paper
money.
Some,
like
industry
lobbyists
at
Coin
Center,
have
noted
the
law
would
likely
be
unconstitutional.
It
likely
won’t
pass
for
other
reasons
—
in
part,
after
the
mess
that
FTX
caused,
U.S.
legislators
are
intent
on
passing
actual
crypto
regulatory
reforms,
and
Warren’s
bill
—
instead
of
taking
aim
at
the
issues
in
blockchain
that
enabled
Sam
Bankman-Fried’s
rise
and
fall
—
is
focused
on
the
incredibly
narrow
issue
of
surveillance.
It
just
isn’t
a
good
use
of
time,
to
say
nothing
of
all
the
other
ways
U.S.
lawmakers
seem
to
waste
the
days
of
the
years.
But
it
is
interesting
that
this
bill
is
coming
up
at
this
time.
In
fact,
Warren’s
DAAMA
bill
is
likely
unconstitutional
in
a
very
similar
way
that
another
truly
worrisome
congressional
proposal
is
likely
unconstitutional:
it’s
seeking
to
expand
surveillance
over
the
bits
and
bobs
of
popular
digital
technologies.
‘Surrogate
spies’
As
Elizabeth
Goitein,
co-director
of
the
Liberty
and
National
Security
Program
at
the
Brennan
Center
for
Justice,
noted
on
social
media
about
the
FISA
Reform
and
Reauthorization
Act
of
2023:
“RED
ALERT:
Buried
in
the
House
intelligence
committee’s
Section
702
‘reform’
bill,
which
is
schedule[d]
for
a
floor
vote
as
soon
as
tomorrow
[Dec.
12,
today],
is
the
biggest
expansion
of
surveillance
inside
the
United
States
since
the
Patriot
Act.
“Through
a
seemingly
innocuous
change
to
the
definition
of
‘electronic
service
communications
provider,’
the
bill
vastly
expands
the
universe
of
U.S.
businesses
that
can
be
conscripted
to
aid
the
government
in
conducting
surveillance.”
Without
going
into
too
many
specifics,
the
so-called
reform
bill
(meant
to
reauthorize
Section
702
of
the
Foreign
Intelligence
Surveillance
Act,
aka
FISA)
would
expand
provisions
in
existing
laws
that
already
compel
internet
and
other
communication
service
providers
to
assist
law
enforcement
and
intelligence
agencies
to
turn
in
information
about
suspect
users.
Goitein
notes
that
by
expanding
a
definition
of
a
“provider,”
those
agencies
would
now
be
able
to
compel
even
more
information
from
even
more
phone,
email
and
text
messaging
records.
She
mentioned
companies
that
may
offer
clients
WiFi
like
“hotels,
libraries
and
coffee
shops,”
because
they
may
run
a
router
that
connects
to
the
internet
and
that
figures
into
the
communications
chain.
It’s
not
just
deputizing
these
companies,
it’s
turning
them
into
“surrogate
spies.”
This
is,
in
the
grand
scheme
of
things,
exactly
how
Warren’s
AML
operates.
Warren’s
proposal
is
written
in
such
a
way
to
increase
reporting
requirements
for
nearly
every
corner
of
crypto.
This
includes
anything
from
centralized
exchanges,
where
filing
“suspicious
activity
reports”
(SARs)
might
make
sense,
and
for
parts
and
players
in
blockchain
where
the
concept
of
collecting
information
on
users
is
…
asinine,
like
node
operators
and
software
developers.
Whether
or
not
the
bill
makes
sense,
or
even
if
its
proposed
expansion
of
the
Bank
Secrecy
Act
is
the
right
tool
for
the
job
(the
BSA
is
arguably
unconstitutional,
as
Coin
Center’s
Peter
Valkenburgh
argues,
and
ineffective
because
SARs
do
not
prevent
crime
just
limit
banks’
liability,
as
ex-CoinDesk
David
Z.
Morris
writes),
the
matter
of
intent
matters.
Warren,
who
has
used
her
“war
on
crypto”
as
a
means
of
soliciting
campaign
donations,
is
clearly
trying
to
make
a
name
for
herself
being
tough
on
crime.
Crypto
may
think
crypto
is
punk
and
radical,
but
there
are
clearly
parts
of
the
industry
that
benefit
Wall
Street,
big
time.
So
Warren’s
messaging
is
at
least
on
brand.
Her
legislative
proposals
are
not
always
successful
(though
out
of
the
330
bills
she’s
written
in
a
decade-long
career,
she
did
enact
the
Consumer
Financial
Protection
Bureau,
which
for
better
or
worse
is
impressive).
But
some
have
argued
she’s
just
trying
to
shift
the
“Overton
Window”
(what
is
politically
possible
to
get
done)
and
to
reinforce
crypto’s
(deserved
and
undeserved)
association
with
crime.
The
bill
serves
the
big
aim
of
attacking
crypto
as
a
trend
as
well
as
the
narrow
issue
of
crypto’s
use
to
fund
terrorism,
launder
ill-gotten
gains
and
in
other
criminal
activities.
“Crypto
should
be
governed
by
the
same
transparency
rules
as
traditional
banks
to
protect
Americans
and
help
ensure
it
isn’t
used
to
facilitate
illegal
behavior
by
criminal
enterprises
and
rogue
nations,”
Warren’s
new
co-sponsor
Van
Hollen
said.
That’s
all
well
and
good,
until
you
consider
how
the
supposed
finance
experts
in
the
room
are
trying
to
get
there:
by
criminalizing
communications.
More
troubling,
it’s
not
the
first
time
and
likely
won’t
be
the
last.
As
Goitein
said:
“At
the
end
of
the
day,
though,
the
government’s
claimed
intent
matters
little.
What
matters
is
what
the
provision,
on
its
face,
actually
allows—because
as
we
all
know
by
now,
the
government
will
interpret
and
apply
the
law
as
broadly
as
it
can
get
away
with.”
See
also:
Code
Is
Not
(Always)
Law
|
Opinion
