As the cryptosphere focused on the drama unfolding around FTX, United States Senators Elizabeth Warren and Roger Marshall introduced the Digital Asset Anti-Money Laundering Act of 2022 on Dec. 14. The seven-page bill would expand the classification of a money service business (MSB), prohibit financial institutions from using technology such as digital asset mixers, and regulate digital asset kiosks, otherwise known as automated teller machines, or ATMs.

Announcing the introduction of the bill at the Senate Banking Committee hearing “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,” Warren, a vocal crypto critic, said:

“Senator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker and Western Union all have to follow today.”

Under the legislation, money service businesses, a classification created by the Financial Crimes Enforcement Network (FinCEN), would be “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 [maximum extractable value] searchers, and other validators with control over network protocols.”

Unhosted wallets, miners and validators were not previous considered MSBs.

Money service businesses would be required to have written Anti-Money Laundering policies and to implement them. The bill would finalize reporting requirements already proposed by FinCEN and impose new requirements, including reporting transactions over $10,000 in accordance with the Bank Secrecy Act.

The bill also instructs the Treasury Department to create a rule banning financial institutions from interacting with “digital asset mixers, privacy coins, and other anonymity-enhancing technologies.”

It would require the Treasury Department, Securities and Exchange Commission and Commodity Futures Trading Commission to set up review processes for the entities that each regulates.

Finally, the bill would create reporting requirements for owners of digital asset kiosks and for FinCEN and the Drug Enforcement Administration.

Related: Institutional crypto adoption requires robust analytics for money laundering

Somewhat like the legislative duo Cynthia Lummis and Kirsten Gillibrand, who authored the Responsible Financial Innovation Act, Warren and Marshall represent opposite ends of the U.S. political spectrum. Warren is a liberal Democrat from Massachusetts, while Marshall is a conservative Kansas Republican.

“I am delighted to see Senator Warren acting in a bipartisan manner by joining with Senator Marshall in the introduction of this bill,” Patrick Daugherty, head of Foley & Lardner’s digital asset practice and adjunct professor of digital assets at Cornell Law School, told Cointelegraph in a statement.

Daugherty acknowledged the bill’s “salutary effect of impeding more thoroughly the abuse of digital assets for crime” but expressed concern about “the loss of financial privacy for millions of digital asset buyers and sellers who are not criminals.”

Casey Jennings, counsel at Seward & Kissel and former Consumer Financial Protection Bureau staffer, told Cointelegraph that the bill could have “sweeping ramifications” for MSBs. The prohibition of institutions from interacting with digital mixers — defined in the bill as “a website, software, or other service designed to conceal or obfuscate the origin, destination, and counterparties of digital asset transactions” — would amount to a ban on mixers and privacy coins.

The requirement that miners and validators do due diligence is also potentially problematic. “Miners and validators are not equipped to perform the new duties that this legislation would thrust upon them. They aren’t banks or brokers, which are already staffed up for this function,” Daugherty said.

This bill by @SenWarren and @RogerMarshallMD is the most significant attack on digital freedom i've ever seen.

It turns validators into money services businesses

It bans financial privacy

It turns America into a full on surveillance state

This is how western democracies die pic.twitter.com/XM1JjM0uL0

— RYAN SΞAN ADAMS - rsa.eth (@RyanSAdams) December 14, 2022

The bill seemed to be “thrown together at the last minute,” Jennings said, and intended to “set the tone” for further discussion in Congress. It has no chance of being considered in this session.

Warren has also promised to write comprehensive crypto regulation legislation that reportedly would favor the SEC in the role of regulator.