The House subcommittee hearing on May 22 laid bare a sharp divide over how much to scale back the Bank Secrecy Act, the 1970-era anti-money laundering law. Crypto firms, traditional banks, and policy experts all pressed Congress to modernize the statute — but disagreed on how far to go. The Trump administration, meanwhile, is quietly expanding the law's reach, complicating the reform push.
The divide on Capitol Hill
Lawmakers on the subcommittee broke into camps. Some argued the Bank Secrecy Act imposes crushing compliance costs on small businesses and crypto startups, stifling innovation. Others warned that weakening the law could open the door to money laundering and sanctions evasion. The hearing exposed no consensus — only a shared acknowledgment that the 1970-era framework no longer fits a digital finance world.
Crypto's push for change
Crypto companies have been among the loudest voices calling for reform. They argue that the BSA's bank-centric rules don't account for decentralized platforms, smart contracts, or self-custody wallets. A coalition of crypto firms, joined by some community banks, urged lawmakers to replace blanket reporting requirements with a risk-based approach. But the industry's ask — a lighter regulatory touch — collided with skepticism from members worried about illicit finance.
The administration's countermove
While Congress debates, the Trump administration is moving in the opposite direction. Executive orders and agency guidance have broadened the Bank Secrecy Act's application, extending obligations to a wider range of digital asset intermediaries. That expansion creates a moving target for reformers, who fear any legislative rollback could be undone by executive action — or leave gaps that bad actors exploit.
The hearing ended without a concrete bill or timeline. A bipartisan working group is expected to circulate a discussion draft in the coming weeks, but the divide between those who want a light touch and those who want more oversight remains deep. For crypto companies, the uncertainty is the real cost — they don't know which rules will apply by year's end.
