U.S. Sen. Elizabeth Warren, a longtime critic of cryptocurrency, called for regulation of the industry to combat money laundering during a congressional hearing on Wednesday.
Warren, a Massachusetts Democrat, said her bill, the Digital Asset Anti-Money Laundering Act, would close loopholes in existing anti-money laundering rules and cut off drug suppliers and cartels from using crypto to fuel their illegal business.
“Crypto is helping fund the fentanyl trade,” Warren said during a Senate Banking Committee hearing. “And we have the power to shut that down. It’s time.”
Fentanyl and other synthetic opioids are the most common drugs involved in overdose deaths in the United States. According to the U.S. Centers for Disease Control and Prevention, over 150 people die every day from overdoses related to synthetic opioids like fentanyl.
China and Mexico are the primary source countries for fentanyl and fentanyl-related substances, according to the U.S. Drug Enforcement Administration.
Warren asked Elizabeth Rosenberg, the Treasury Department’s assistant secretary for Terrorist Financing and Financial Crimes, about whether Chinese companies used crypto in illegal drug transactions.
“Unfortunately, that is a mode that some of these precursor manufacturers and illicit drug organizations have used,” Rosenberg said.
Warren also cited figures from research firm Elliptic showing 90 Chinese suppliers sold “enough precursor drugs in exchange for crypto to produce $54 billion worth of fentanyl pills.”
Warren first introduced her Digital Asset Anti-Money Laundering Act late last year. The bill would require cryptocurrency exchanges and other businesses that facilitate the transfer of crypto to comply with existing anti-money laundering rules.
The cryptocurrency industry has pushed back against Warren’s bill, arguing that it would stifle innovation and make it more difficult for legitimate businesses to operate.