Crypto Reckoning? US Banks Urge Stricter AML And Sanctions Rules–Industry Pushes Back
A renewed push to tighten anti–cash laundering (AML) and sanctions necessities within the United States has sparked a recent debate between conventional banking advocates and crypto coverage leaders.
The newest spherical of consideration comes from the Washington, DC-based Bank Policy Institute (BPI), which launched a brand new report titled “Time for a Reckoning on AML and Crypto.”
BPI Calls For US AML And Sanctions Overhaul
In the doc, the BPI argues that cryptocurrencies and stablecoins are getting used extra typically by cash launderers and terrorist financiers, and it claims that, in contrast to banks, crypto companies don’t face equal authorized obligations to safeguard the monetary system from abuse.
BPI says Congress now has a chance to right that imbalance via market construction laws, framing the problem as tied not solely to monetary integrity but additionally to US nationwide safety.
BPI’s case depends closely on knowledge it says highlights how illicit activity involving crypto continues to develop. The institute cites Chainalysis’s 2026 Annual Report, saying that illicit crypto addresses acquired $154 billion in 2025—a rise of 162% year-over-year.
The report additional claims that crypto “is funding critical crimes,” stating that the intersection of cryptocurrency and suspected human trafficking intensified in 2025, with whole transaction quantity reaching “lots of of hundreds of thousands of {dollars} throughout recognized providers,” which BPI describes as an 85% year-over-year improve.
At the identical time, BPI says regulators are already shifting towards extra comparable obligations, pointing to what it describes as Treasury’s latest Notice of Proposed Rulemaking on AML and sanctions obligations for stablecoin issuers.
BPI interprets the proposed method as establishing stablecoin-related tasks just like these relevant to banks, and it argues {that a} comparable mannequin ought to prolong to different crypto intermediaries.
BPI’s general conclusion is that the US mustn’t deal with compliance as a aggressive benefit for some companies over others. Instead, it argues, market members ought to share the identical baseline obligations so illicit exercise doesn’t exploit variations in authorized protection.
Crypto AML Debate Heats Up
The report drew a right away response from crypto management. Coinbase’s Chief Policy Officer, Faryad Shirzad, criticized what he known as the framing of the BPI report, saying that the “reckoning” ought to be broader and that the BPI’s narrative leans too closely on a single headline determine.
Shirzad identified that BPI leads with Chainalysis’s $154 billion illicit determine for 2025, however he stated the identical Chainalysis report concludes that illicit exercise stays below 1% of whole on-chain quantity.
He added that TRM Labs estimates the determine at 1.2%, and each companies, in accordance with Shirzad, notice that the illicit share has stayed at or under these ranges for years. In his view, the numbers don’t assist a framing that means crypto is uniquely or overwhelmingly dominated by legal use.
Shirzad additionally broadened the comparability past crypto to the traditional financial system. He cited estimates from the United Nation Office on Drugs and Crime, which estimates that 2–5% of world gross home product is laundered via the normal monetary system, together with the banks that the BPI represents.
Importantly, Shirzad didn’t argue that crypto regulation is pointless. Instead, he stated none of this excuses crypto from scrutiny. He acknowledged that dangerous actors exploit each monetary rail and that stablecoin issuers and exchanges ought to put money into AML efforts, sanctions screening, and intelligence sharing.
Featured picture from OpenArt, chart from TradingView.com
