Senators Search for Digital-Asset AML Compromise
Today’s Senate Banking Committee Hearing with Deputy Secretary Adeyemo reviewed the Administration’s request for additional digital asset AML/CFT authority. Democrats were generally supportive of outlined statutory changes, citing various potential legislative solutions. Republicans focused their criticism on the Biden Administration’s efforts to sanction Iran, noting the growth of Iranian oil exports to China as a major avenue of sanction evasion. Although Ranking Member Scott (R-SC) called digital assets the “scapegoat” of this administration, Sens. Tillis (R-NC) and Hagerty (R-TN) floated a discussion draft of legislation to ensure that AML standards apply to centralized, consumer-facing digital asset financial institutions, calling this a good first step to ensuring the broader AML coverage sought in the Warren-Marshall bill (S.2669). Chairman Brown (D-OH) gave no indication of whether he is prepared to give the GOP’s approach consideration as he and others work to include a digital-asset AML bill in legislative vehicles. As noted earlier today, Sen. Warren (D-MA) made it clear that she has considerable problems with pending bipartisan House stablecoin legislation; we think compromise here is quite possible if something AML-related advances which Sen. Warren is willing to support. Surprisingly, Republicans did not use the hearing to press Treasury on SAR surveillance despite Sen. Scott’s letter raising serious concerns in this arena. Much of the hearing also addressed the committee’s bipartisan bill (S.1271) authorizing sanctions targeting fentanyl trafficking.