Sen. Elizabeth Warren just introduced an anti-crypto bill that seeks to force KYC on nodes, wallets and validators. This is insane

The first knee jerk reaction from legislators is here. Senator Warren just introduced a bill titled "Crypto Anti Money Laundering Bill" that has major ramifications on how crypto will be treated.

It seeks to classify every crypto entity including wallets, nodes, validators, dapps, developers etc as "money service businesses" and forces FinCEN to regulate these. This means all of these crypto entities would have to introduce KYC norms.

The most damaging aspect of this bill is this section:

The Financial Crimes Enforcement Network shall promulgate a rule classifying custodial and unhosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV searchers, and other validators with control over network protocols as money service businesses.

According to this bill,

1. Both custodial and non-custodial (unhosted wallets)
2. Miners, validators, "other nodes" who may validate or secure third party transactions
3. Independent network participants including MEV searchers
4. "Other validators"

Will all become MSB i.e money service businesses.

MSB's are already regulated: https://www.fincen.gov/money-services-business-definition

Every MSB must comply with these regulations, which include obtaining registrations, KYC of all its users. etc.

Each money services business (MSB) is a financial institution.

So this bill seeks to treat every miner or validator or node or wallet as a financial institution. This means even wallets would have to comply with stringent AML laws. At this point it does not appear clearly as to how wallets will even track KYC of all its users. This would probably outlaw self custody wallets since they have no way to track KYC of its users. I mean, how will electrum or metamask KYC its users?

This bill effectively outlaws privacy coins like Monero and makes all kinds of mixers and privacy tools illegal - because such privacy chains and tools cannot possibly comply with these regulations. Edit: Actually, its much worse - it straight up prohibits dealing with any kind of "anonymity enhancing technique". This bill flat out prohibits privacy coins.

Here is the part of the bill that totally prohibits all kinds of privacy:

Not later than 120 days after the date of enactment of this Act, the Secretary of the Treasury shall promulgate a rule that

(1) prohibits financial institutions from handling, using, or transacting business with digital asset mixers, privacy coins, and other anonymity-enhancing technologies, as specified by the Secretary; and

(2) handling, using, or transacting business with digital assets that have been anonymized by thetechnologies described in paragraph (1)

The opposition to this draconian bill already begin: https://www.coincenter.org/the-digital-asset-anti-money-laundering-act-is-an-opportunistic-unconstitutional-assault-on-cryptocurrency-self-custody-developers-and-node-operators/

Here is the copy of the bill: https://www.warren.senate.gov/imo/media/doc/DAAML%20Act%20of%202022.pdf

http://edition.cnn.com/2022/12/14/business/elizabeth-warren-bipartisan-crypto-crackdown/index.html

This just happened in the last hour or so, and more reactions are just coming in. Across the board in crypto, everyone is in opposition to this - the bill literally does nothing to prevent scams like the ones we witnessed from happening, but instead will push more people to underground/off shore jurisdictions where other scammers can take advantage of them.

This post is being brigaded from the losers over on r/buttcoin LMAO