Business Meeting on H.R.3633: SEC and CFTC Regulation of Digital Commodities

Here we go.

Good morning. I hope you all are doing well. Uh, it is good to be here this morning. I call the committee to order and move to executive session. Any members who may wish to speak on the bill can do so after votes. Amendments will be called up in order of seniority. alternating between the majority and the minority. Senators will be permitted to speak on their amendment prior to voting on them for up to but not to exceed two minutes we will begin with opening statements. Today is an important day, not just for this committee, but for the country. For years, the digital frontier was trapped in a regulatory gray zone. Developers, entrepreneurs, and investors were left with uncertainty. They faced confusion in enforcement actions when, instead, the government should have been crafting clear rules of the road. Those hurdles drove innovation overseas, left Americans exposed, and made it harder for law enforcement to do their job. Today, we change that. The bill we are marking up achieves three simple goals. Number one, protecting consumers. Keeping innovation here at home and safeguarding US national security. Those are not partisan goals. They are American priorities. Protecting consumers means making sure everyday people come first. It means clear disclosures, safeguards against fraud, and rules that keep markets open, fair, and efficient. It means that if someone in South Carolina invests in digital assets, they are protected by a framework with real enforceable legal standards. This bill gives Americans confidence that the system works for them, not against them. Keeping innovation here at home means giving American builders, entrepreneurs, and businesses the clarity and certainty to do what they do best. Until today, outdated rules, unpredictable enforcement, and outright hostility have forced far too many American companies overseas. That cost us jobs, investment, and leadership. This bill says that the future of finance should be built in America. under American laws Yeah, we have to look at the rules. and with American values.

That's right.

Safeguarding our national security means closing the doors that criminals terrorists and hostile regimes have tried to exploit. This bill strengthens anti-money laundering and sanctions rules and gives law enforcement better tools to go after bad actors. These tools make it harder to hide and easier to enforce the law. None of this happened overnight. It happened because members on both sides of the aisle chose to sit down, listen, and work. We've had months of good faith negotiations. Republicans did not get everything we wanted. But we made real progress with our Democrat colleagues. And this bill, and ultimately, and more importantly, the American people, will be better off because of it. This legislation does not take sides between traditional finance and new technology, or Republicans and Democrats. It takes the side of everyday Americans. It brings digital assets out of the shadows and into a system that is safer, fairer, and more transparent. This is what good governance looks like. Today, we take a step forward together to protect investors, grow our economy, and keep America leading the world. I'm proud of this committee for doing the work, and I look forward to moving this bill forward. And I'll recognize Ranking Member Warren for opening comments.

Uh, thank you very much, Mister Chairman. Right now, American families all across this country are struggling. cost of groceries is up, the cost of utilities is up, the cost of health care is up. We could be working right now on changes in the law that would help bring down prices and help un-rig our economy. You know, we could be working on capping credit card interest rates every day that we fail to deliver. Families are charged an extra three hundred and sixty-eight million dollars in interest. We could be preventing big banks from saddling customers with overdraft fees. Every year that we fail to deliver, families could be paying up to five billion dollars a year that they otherwise would be able to keep. We could be stopping rampant fraud and theft on payment platforms. Our failure to deliver here means that Americans are paying hundreds of billions of dollars

Mm-hmm.

after getting tricked and trapped. But instead of that, We're spending our time working on a bill written by the crypto industry for the crypto industry.

Hmm.

Nothing made it into this bill that wasn't approved by the crypto industry. And why? Uh, why are we working on this? According to a survey by crypto news outlet Coindesk, quote, crypto is at the bottom of US voters' priority heading into elections, just one percent of respondents rank crypto as their top concern. Look, our job is to serve the American people. Our job is not to advance a pro-industry crypto bill that will put American consumers, American investors, and our national security and our financial system at risk. Our job is not to advance a pro-industry crypto bill that will grease the skids for the President of the United States' crypto-grift, while tens of millions of Americans can't afford the basics. Many members of this committee have underscored the importance of getting this bill right. And despite multiple calls for a public hearing on this bill, calls from Senator Reid, Senator Kennedy, Senator Van Hollen, Senator Smith, We have never had a single hearing on this bill. And today, Mister Chairman, you are shutting down members of this committee who have amendments to strengthen this bill. You ruled out more than a dozen amendments because of quote " procedural requirements". And take a look at what got ruled out. This includes a fix requested by the National Sheriffs' Association to close a massive loophole in the current bill that would make it harder for law enforcement officials to go after cartels and criminals using decentralized platforms to launder money. So, the sheriff's concerns have just been cut out. This includes a fix from community banks to stop a significant flight of deposits out of the banking system that will hurt small businesses and communities across the country. An amendment to help community banks? We won't even get a hearing today, much less a vote. Now, Mister Chairman, you could simply reverse your ruling right now, and I would welcome a full debate on every single Democratic and Republican amendment that has been filed to fix the very real flaws in this bill. Look, this bill is just not ready. for prime time. First, the draft in front of us would blow a hole in our securities laws that have protected investors since nineteen twenty nine. Most Americans don't want their pensions at risk so that a few crypto billionaires can juice their own profits. Second, this bill declares open season on defrauding American consumers who use crypto. The bill wipes out a huge number of state-level protections against fraud. Third, the bill puts our financial system at risk by repeating the mistakes of two thousand eight, letting the banks load up on risky debts, letting them scrape off the profits, and then, when it all comes crashing down, come back to the American taxpayer for a bailout. Fourth, The bill puts our national security at greater risk. Just three days ago, three days ago, the Treasury Department issued an alert warning that Iran is exploiting crypto businesses to move their money around. Multiple public analyses documents that crypt- that drug cartels are shifting their money laundering to crypto and, quote, "the cops can't keep up." And finally, the bill doesn't lift even the tiniest finger to address the Trump administration's crypto-related corruption. Since taking office last year, President Trump and his family have amassed a staggering one point four billion dollars in gains from crypto deals alone. No president and no one in Congress should be allowed to profit from crypto at the same time that they are enforcing rules to regulate it. This kind of corruption undermines our democracy and it undermines the legitimacy of the crypto industry. It will keep right on growing if Congress fails to rein it in. Now, a year ago, some of you may remember, Republicans sat in this very room and made one promise after another as they passed the Genius Act. What did they promise? They promised we'll close the national security loopholes. They promised we'll address glaring ethics problems. They promised we'll fix the yield issue. Republicans told us not to worry about the gaps in the first crypto bill because the second bill the bill we have today would fix every one of those problems. Well, today we are voting on the second bill, and every one of those problems still exists today. And this time, the same Republicans are shutting down amendments that would make the fixes they promised a year ago. This mark-up is our chance to fix these problems. And until we fix these problems, None of us, Republican or Democrat, should advance this bill out of committee or onto the Senate floor. Thank you, Mister Chairman.

Yes, ma'am. I do wanna make a couple of comments about the uh process that we've undertaken over the last several months, and particularly as it relates to some of the amendments that were taken out because they were not in order. After the amendment process had a walkthrough, Ranking Member Warren's staff objected to a Republican amendment on a technical drafting issue, arguing it it should be thrown out because it referenced the wrong substitute amendment number. Once they insisted on that standard, committee staff reviewed an the full amendment roster to ensure consistency. Staff confirmed with a c- with a committee clerk in consultation with a parliamentarian and floor staff that there were amendments that were filed incorrectly. What I decided to do was to, as opposed to throwing all those amendments out, throughout only the ones that were the most egregious. So the process that we've actually gone through was to make sure that both sides had an opportunity. But this whole discrepancy started when staffers decided to target a Republican amendment, and frankly as my colleagues on my right recognize, I threw out amendments on our side as well, and had to talk to our folks about that. At this time, I'll recognize

Mr. Chairman, might I might I reply on that?

Sure.

I appreciate the work we do together.

Sure.

But I want to correct the record on one important issue. It is your call and your call alone to rule these amendments out of order. When we talked last night, I made clear I'm happy to have all of the amendments in, all of the Democratic amendments in, all of the Republican amendments in. You and you alone have decided which amendments are in and which amendments And that creates a problem, cuz there are some very important amendments that address some very important issues that I think we should hear from, so I will reiterate my lack of objection today. Let them all be heard. Let us vote on all of them.

Thank you. That doesn't change the fact on how we got to where we are, however. It was brought by my staff, it was brought by your staff, number one, number two. Let me just say this very clearly, because I'm not gonna go back and forth on this issue. Democrats have frankly worked hard on this bill. Uh, our bill first came out in June of last year. Since June of last year, we've added thirty-three thousand words, two hundred and nineteen pages, in an effort to make this legislation as bipartisan as humanly possible. I can't imagine uh how much time Senator Alsobrooks has spent on this legislation. Frankly, frankly, during very difficult and challenging times, her focus remained on getting things done and Till has worked with her on on parts of the very legislation that we're talking about where the negotiation allowed us to get to where we are. Gallego has spent a ton of time talking with members on this side, Bernie Moreno and others, trying to find a path forward. So the truth of the matter is, as frustrating as process has been without question. When I talk to members on your side of the aisle, including Warnock and and Senator, what do we call her, CCM, but Catherine Catherine Cortez Masto and Senator Warner, the one thing I can tell you, the entire process, we have disagreed vehemently, but respectfully and consistently, and working towards an end result that makes America better. As a kid who grew up in poverty, the thing that attracts me to this issue the most is democratization, an opportunity to lower prices, create access points that today does not exist. This ought not be about Republicans and Democrats. It ought not be about who's on which side of the aisle or whether you agree with what we've done. This should be about the American people and nothing else. I want single mothers like the one that raised me to have more opportunities more access at a lower price. And so we will disagree on this today. But I hope that what we end up with is a legislative product that is good now and gets another bite at the apple as it heads to the floor. This is not over. And I hope that no one thinks that this is over. This process has been transparent, it has been hard, and it has been clear. And that's good news. for the American people who are watching this process. I tried my very best to take the expertise of an AG who understands issues better than others I worked really hard with folks who was a county uh supervisor as I was uh to understand the local impact and community banks. We've done a very good job of putting it together. Now I'm a little long winded as I wanted to be a preacher like we're not. Right, but I cou- but but but but but but it didn't work out for me. God didn't, God didn't call me to that. He didn't call me to that.

Mister Chair, stay in your lane.

Yes, yes, yes, yes, yes. Someone should say amen before he takes up an offering, but I'm just Here's here's the point. Here's the point. This is a real opportunity to move the ball forward for a lot of people in a lot of places. That's losing confidence in American institutions. Let's not demonize because it's easy. Let's work together because it's hard and important. Senator Lummis, the floor is yours.

Mr. Chairman, I have a point of order.

Certainly.

Thank you. Uh, and I agree with you. I think we need to continue to move forward. And so in that vein, uh, my question is, so I don't th we don't run afoul of this in the future, is The amendment um Cortez Masto sixteen was ruled out of order.

Yes.

And can you explain what why it was out of order? That would help me in the future.

Certainly. We we asked all amendments to be written to written to the ANS. And the amendments were written to the Friday Clarity Act. Friday Friday when we released the the legislation.

Mm-hmm.

We asked the amendments to be written to the Substitute language.

Right. And it was.

It was not.

How was it not? Uh that would be helpful, just so I know. I can pull it up. It was it was written to the HR and it is a strike and replace of text in the HR that was not in there because it is uh it's in the ANS. We talked to the floor and they said if they had received an amendment like this, that it's a strike and replace, written as a put in the appropriate place, it would not have been accepted on the floor. So just so we have a clarification for the future for all of us,

Certainly.

so we don't get caught in the this or that,

Yes, yes.

these or ours. Um, I asked the parliamentarian if this was out of order, um, and she said no. And so I do think it will be helpful in the future, um, so that we don't get caught up in this craziness, and we still can move forward as a body that works together on amendments, has conversation discussion. that we have an understanding uh of of these amendments. So I just appreciate you taking my point of order.

Absolutely.

And and for the record, I I will submit the parliamentarian's response to to the question that I had about my amendment number sixteen.

Without objection,

Thank you.

we we will submit our uh conversation with the parliamentarian as well. Senator Lomas, the floor is yours.

Mm-hmm.

Thank you, Mister Chairman. Um I wanna start by a casual conversation among friends that are around this dais. Mister Warner, thank you so much for working so hard on this bill over the last nine months. Um, Senator Cortes Masto, thank you, you brought a level of expertise on illicit finance that none of the rest of us had, and I wanna thank you so much for that. Uh, your thoughts, Mister Warnock, throughout the last nine months have been additive to what I think is a very good bill. Uh, Mister Gallego has worked tirelessly behind the scenes on multiple issues that are involved in this legislation. And I wanna single out uh Senator Alsobrooks for her tremendous time commitment and work with Mister Tillis on the language uh that has helped bring this bill uh to the floor today on uh on on the concerns that the banking industry had about uh the genius act. This has been a bipartisan dialogue that has gone on for nine months. It has been almost tireless. And um, Mister Marino, uh, Mister Tillis, uh, Mister Kennedy, um, honest

Ah, everything.

And and especially Senator Scott, who has kept us on track for nine months. This is the hardest piece of legislation I've ever worked on. I served fourteen years in the Wyoming legislature eight years as State Treasure and now fourteen years in the Congress this is by far the hardest piece of legislation I've ever worked on. And your colleague uh Kirsten Gillibrand said the same thing, and she has more experience than I do in the US Senate. And it's because this is a case of first impression. This is a very new commodity in security. And it takes time to craft something to address the innovation that has been brought about through blockchain technology. And that's why it's taken such a bipartisan effort, heavy lift, lots of negotiations, involvement from those people who are in the industry. And it has morphed since we began this bill five years ago, because the industry has matured over those years. This is new. And to have something this innovative, uh, come to us, uh, via legislation today, really is quite remarkable. So I wanna thank the people in this room, uh, both in the audience and at the table for their tireless dedication. Treasury, the White House, the industry, we have all worked hard together, and I pledge to you, we will continue to work hard together after today and before this bill hits the floor to address that maybe one percent of the remaining issues uh that didn't come to fruition uh before today, in spite of our round-the-clock uh negotiations. This is America's innovation of the two hundred and fiftieth anniversary of our Constitution. There's been nothing like it in our history. Um, this bill continues the legacy of America by ensuring innovation happens here, on US soil, under clear pro-growth, pl- pro-consumer guidelines. And I can't resist, Mister Chairman, when I was listening to, uh, the ranking, uh, member, the risks of which she spoke exist now, right now, because There is no regulatory framework. There is no way, now, uh, that this industry can protect the good actors, discover, vet, and punish the bad actors, and create a playing field with clear regulation, both at the SEC and the CFTC, that everyone can play under and continue to innovate. We can return this industry to the United States because the majority of it has already leapt for overseas, because this legislation wasn't ready until today. Let me go through a couple of the things that we have done to strengthen and address some of the issues that have been raised. Regard to anti-money laundering and illicit finance. It creates risk-based exam standards. It expands Treasury's special measure authority to act swiftly against foreign money laundering. It creates studies on mixers and tumblers. It requires annual Treasury reports on foreign jurisdictions' compliance, with US AML CFT standards. It requires recurring Treasury on offshore stable coins. It requires mandatory educational materials on digital asset risks, insider resale restrictions to prevent pump and dump schemes. It has timely disclosure requirements, broker deal insolvency disclosures, a federal regulatory floor for crypto kiosks. This is very important. This has been a problem in my state. Tokenized securities remain securities under SEC jurisdiction. FTC authority over unfair or deceptive practices. Thirty million per year through twenty thirty-one for FinCEN. With regard to fraud and AML provisions, temporary holds for suspicious activities and preventing those who place the holds uh from having private causes of action. It applies BSA regulation to digital asset brokers, dealers and exchanges. This list goes on and on. This is a pro-law enforcement bill. And it's also a pro-consumer bill. Consumers can now transmit money between them faster and cheaper than they can now. It provides a level playing field regardless of whether you live in Rwanda or Queens, New York, about transmitting money faster and cheaper. It provides a woman who's trying to get out of a battered, miserable marriage the opportunity to walk away with her money in her head. It provides people who are being tortured in foreign countries the opportunity to walk away from that country with their money. in their head, because Bitcoin can be memorized. This is an innovation that provides individual freedom, individual savings, it is faster, cheaper, it is secure, and we're inviting that consumer environment into our country under a very clearly articulated set of rules.

Mm-hmm.

And it's because of all the work that has gone into this by the people in this room. I absolutely pledge that I will work with you before this bill gets to the floor. We know those few remaining little items that we have to work on together. I trust you. And I want you to trust me to see this process through. Because we know when we work together that we can create a product that we can be proud of and the American people can be proud of. Thank you, Mister Chairman.

So tell us.

Uh, very quick, Mister Chairman. S uh Senator Lummis did a wonderful job. I just wanna reinforce uh a couple of things. You know, quite honestly, when I heard the ranking member talk, I thought I'd teleported into a parallel universe where we were talking about a different bill that was being negotiated. Uh, this bill has all of the attributes that uh Senator Lummis uh discussed. Uh that's why AARP has endorsed it. That's why law enforcement supports it, because the status quo, quite honestly, is unacceptable. Um not to mention the competitive threat that we have uh for foreign jurisdictions, just to take the money elsewhere and then th- we're aiding and abetting and expanding the use of illicit finance through this tool. Um but we I don't need to get into those merits or uh the merits of the bill anymore. I just wanna think s Senator Alsabrooks, I wanna thank Senator Gallego. I wanna thank Senator Cortes Masto, who really uh uh opened my eyes to some of the prosecutorial issues that uh that I as a non-attorney hadn't paid attention to. Senator Warner, Senator Warnock. Yeah, I've done a lot of bipartisan bills uh in my time in the Senate. And the only way this works is a bipartisan vote out of this committee to get all these things that are in this bill moving. But the Democrats have ball control. They control the motion to proceed. Like Senator Lummis, I'm committed to working good faith, and I think I've proven that multiple times when it was tough for a Republican to lead something. And I'm gonna do it again here. Um, but let's get the momentum out of this committee. Uh, but finally, and and I and I have to tell I told Senator Alcer Brooks this morning, what a joy it's been to work with her staff. And the one the one group here,

Senator Reiden, this this will be the the the last comment uh Sen- Senator Warren has just helped me remember that Some members have to go to other committees, and we should get to the amendments. Uh, Senator Reid, the floor is yours.

I'll be very brief, Mister Chairman. Um I've heard both you and Senate alumnus s- speak eloquently about working together. I've been on this committee almost thirty years. Uh, the definition of working together at a mark-up is allowing amendments to be called up and voted upon. It's the vote determines where we go forward. And what I've never witnessed anything like this in these thirty years, where there's arbitrarily eliminating amendments, uh telling people they can't bring them up or modify them to be brought up. And um uh I'm willing to work together, but this is not an example of working together. Thank you.

I move to call up HR thirty six thirty-three the digital asset market clarity act of twenty twenty five and ask unanimous consent that we dispense with the reading of all amendments senators will find printed copies in front of them the text of which has already been made available is there an objection without objection so ordered i move to consideration of the manager's amendment scott amendment number one it is an amendment the nature of the substitute to hr th thirty six thirty three i ask that scott amendment number one the substitute amendment be adopted and considered as original text for purposes of further amendment, I ask that the amendment be adopted by voice vote. All in favor say aye.

Aye.

All opposed? No. Ayes have it. The ayes have it and the amendment is agreed to. I now call up rounds one thirty three. Senator Rounds, you're recognized.

Thank you, thank you, Mister Chairman. Uh my amendment uh number one thirty three uh I have with cosponsor Senators Kim and Warner and I would thank them for their participation in this. Uh, this amendment would require financial regulatory agencies to establish AI innovation labs or sandboxes. These will enable regulated financial institutions to experiment with AI test projects without expectation of enforcement action, taking a balanced approach that encourages both innovation and responsible adoption of AI. This amendment would create a venue a sandbox for institutions to safety test and experiment with cutting edge technologies while allowing regulators to learn about the tools that will transform financial services. It closely aligns with the purpose of the bill we are considering today, which is why I urge my colleagues to support this amendment. And uh I thank you, Mister Chairman, and I would ask for a vote.

Right.

Mister Chairman.

Yes, ma'am.

Uh, I'd like to be recognized on this amendment,

Okay.

is that all right?

Sixty seconds, yes ma'am.

Okay, so this amendment would establish a sandbox, as um Senator Rounds says, for artificial intelligence products and services in the financial sector. Look, I appreciate my colleague's interest in this issue, but boy, I am not ready to support this proposal. This is not the place to make decisions about AI regulation. Um, the committee should hold hearings on the implications of AI, we should have a debate. about the policy options. I am happy to work with my colleagues to see if there's a version of this amendment that we can support. But this provision is not there yet, and I don't think a track record of these sandboxes over the past decade in financial technology or fintech context should give us much confidence that that actually turns out to have good results for the American people and that it ensures safe innovation for AI. So I think this is way too big for a little amendment like this and open stores we should not be opening without a much fuller discussion and uh hearings. So I would urge my colleagues to vote no on rounds one thirty-three.

The clerk will call the roll.

German.

Aye. Mister Crapo.

Aye.

Mister Rounds.

Aye.

Mister Tillis.

Aye.

Mister Kennedy.

Aye.

Mister Hagerty.

Hagerty's aye.

Miss Lomas.

Aye.

Mrs. Britt.

Aye.

Mister Ricketts.

Aye.

Mister Banks. Mister Kramer.

Aye.

Mister Moreno.

Aye.

Mister McCormick.

Aye. Sorry.

Miss Warren.

No.

Mister Reid.

No.

Mister Warner.

Aye.

Mister Van Hollen.

No, by proxy.

Miss Cortez Masto.

No.

Miss Smith.

No.

Mister Warnock.

No.

Mister Kim.

Aye.

Mister Gallego.

No.

Miss Blunt Rochester.

No.

Miss also Brooks?

No.

The vote is fifteen in favor and nine opposed.

The agreement, the amendment is agreed to, I now call up Warren number seventy four.

Uh, so let's talk about some of the people who will be hurt by a bill that supercharges the crypto industry without guardrails. People saving for retirement and people with pension plans. The current draft fails to address one of the biggest concerns that retirees face in this bill, the tokenization loophole. This country's biggest workers' unions and groups representing the largest pension funds have said that this is a catastrophic problem. Under this bill, companies could escape basic securities laws by raising money through tokens rather than traditional securities like stock. exposing Americans to a host of risks by removing necessary investor protections. The bill also kneecaps federal and state law enforcement authorities' ability to crack down on crypto-fraud and scams. In other words, this bill sets up investors to be defrauded with no recourse. My amendment would require investment advisors and other entities in the financial system to develop and implement processes to protect investors from the heightened risk posed by crypto before recommending it to Americans looking to invest their hard-earned money. Every member of this committee should agree with this simple fix to protect our investors. And I urge my colleagues to support Warren Amendment seventy-four.

Someone who wants to be recognized for rebuttal. Rebuttals are only sixty seconds.

Madam Mr. Chairman, this amendment would single out digital assets for a special presumption of non-compliance and create unnecessary litigation risk. Uh, this amendment should not be adopted. It requires fiduciaries to implement special processes to protect clients from digital asset risks, or be presumed to have violated their fiduciary duty. Current fiduciary standards already require intermediaries in their client's best interest making this amendment unnecessary

clerk will call the roll

chairman

no

no

mr. Crapo

no

mister rounds

no

mister tillis mister kennedy

no

mister hagerty miss lomas

no

missus brit

no

Mister Ricketts.

No.

Mister Banks.

No.

Mister Kramer.

No.

Mister Moreno.

No.

Mister McCormick.

No.

Miss Warren.

Yes.

Mister Reed.

Aye.

Mister Warner.

Aye.

Mister Van Hollen.

Aye by proxy.

Miss Cortez Masto. Miss Smith.

Miss Smith.

Aye.

Mister Warnock.

Aye.

Mister Kim.

Aye.

Mister Gallego.

Aye.

Miss Blount-Rochester.

Aye.

Miss Alsabrooks.

Aye.

The vote is eleven in favor and thirteen opposed.

The amendment is not agreed to, we'll now go to Brit fourteen. Senator Brit, you are now recognized.

Thank you, Mister Chairman, I'd like to offer Brit number fourteen my amendment regarding four O three B savings accounts. This bill is bipartisan, it is very simple, it is widely supported. It allows employees of non-profit organizations like public school teachers, ministers, nurses, it allows them the same access to the four O one K retirement plans that most Americans can enjoy. CITs offer a wider investment vehicle along with lower fees and even higher returns, and this will allow them to participate in that. This levels the playing field so that more hard-working Americans can access more investment options and ultimately retire sooner. I wanna thank Senator Warnock for leading this stand-alone bill with me and a number of my colleagues here on this committee, both Democrat and Republican,

Yeah.

uh who have cosponsored it. Um I am committed to finding a vehicle for this to move. I am also committed to making sure that the Clarity Act um moves out today, so we will look for a different vehicle um and will continue to build support. I withdraw my amendment But look forward to working with the chair and the ranking member to actually get this done.

Thank you very much. And now I'll call up Warren, sixty four.

Thank you, Mr. Chairman. So this bill that we're looking at fails to address foundational gaps on money laundering responsibilities for conventional crypto businesses and for DeFi services. And even for the very worst platforms, this bill fails to restore sanctions authority to isolate them. While we're at war, Iran is openly gearing up to collect crypto fees from oil tankers to pass through the Strait of Hormuz. Terrorist groups, rogue states, foreign adversaries, and criminals are using crypto to evade our sanctions and launder their money. According to industry analysts, crypto crime jumped at least one hundred and fifty-four billion dollars last year, driven in large part by a six hundred and ninety-four percent increase in crypto funds sent to sanctioned entities. Sanctioned entities are receiving these. Look, we need to fix the hole in our sanctions authority and crack down on crypto money laundering. In twenty twenty two, the United States sanctioned a notorious mixer called Tornado Cash that had been used to launder more than seven billion dollars for and foreign adversaries, including more than four hundred and fifty million dollars for a North Korean hacking group. These types of crypto services are designed to make it easy, to launder a huge pile of money, and making it hard for anyone, including our law enforcement officials, to tell where the money came from. They are a favorite tool for hackers, for terrorist groups, and for sanctioned regimes. But a court said Treasury needed Congress, us, to act before it would be able to sanction the mixers like Tornado Cash. So this amendment is simple. It restores the authority to isolate and sanction decentralized crypto-platforms that repeatedly facilitate transactions with terrorist organizations like ISIS or Al-Qaeda or with North Korea, Russia or Iran. And I urge my colleagues to support this amendment.

S- Senator Lammes for a rebut.

Thank you, Mr. Chairman. Um, the reason that's happening is because this bill is not law. When this bill becomes law, it includes robust provisions in titles two and three to address illicit finance and sanctions. And it focuses these provisions where they'll be most effective. For example, it provides law enforcement with the tools they need to trace and disrupt money laundering and clarify sanctions and anti-money laundering requirements for digital asset entities. Uh, we want to discourage the illegitimate l- use of a l- of digital assets, while encouraging the legitimate use. And we have found that balance in this bill. This amendment is not necessary. I urge that we oppose the amendment.

Mister Chairman.

Kennedy.

Kennedy.

Yes sir.

Yes sir, Senator Kennedy.

Uh w- do I have your permission to ask Senator Warren a quick question?

Fifteen seconds.

Yes sir.

It'll take him that long to clear.

Sen- Senator Warren

Yep.

I don't understand why this bill doesn't already accomplish the very worthy goal that you've articulated.

Just who can I ask? Mr. Chairman?

I mean

May I answer?

Fifteen seconds.

It's the tornado problem. You you remember tornado, the mixer.

Yeah.

What this amendment does is it says that the government can sanction and wall off a mixer-like tornado. What purpose does tornado serve except to hide where the money came from and where the money's going to? And who needs to hide where the money came from and where the money's going to? It's the terrorists, it's the money launders, it's Iran, it's the sanctioned entities. So all this is doing is it's saying let's give the power, it doesn't actually isolate them in the bill, let's give the power to government to say when this is what you're doing, they can they can isolate you when you're dealing with these bad actors. You're mixing up the money so that you advance money laundering.

Senator Lummis, and then we'll move to the vote.

Yeah, thanks, Mister Chairman. This bill provides for a study of the use of mixes and tumblers. They're a very complicated entity. Plus, provides thirty million dollars to FinCEN, uh which does have the expertise to unravel mixes and tumblers, uh and already has the tools it needs to enforce.

Yeah. Can I just say on that, yes, they have the expertise. But they don't have the legal authority. A court has said they need legal authority from Congress so that they will be able to isolate these minxers. Right now they can't do that. So put your money in if you're a terrorist. Go use Tornado and know that there will be virtually no chance of being caught. Um and that this is how Iran can stay in the game and keep using its money.

Right.

This is how North Korea stays in, I'm sorry.

Certainly. Rebut Senator Lummis. The bill solves that problem?

Yes, title two and three. Um, and it's in, uh, illicit finance sanctions focus on providing law enforcement with the tools they need to trace and disrupt, money laundering, including mixes and summaries.

A study.

Well It, the law enforcement tools are also in this bill.

Could call the roll.

Chairman?

No.

Mister Crapo?

No.

Mister Rounds?

No.

No.

Mister Tillis?

No.

No.

Mister Kennedy?

No.

Mister Hagerty? Miss Lummis?

Hagerty's no.

No.

No.

Misses Britt? Mister Ricketts?

No.

Mister Banks.

No, thank you.

Mister Kramer.

Sorry, no.

Mister Moreno.

No.

Mister McCormick. Miss Warren.

Yes.