A renewed push to tighten anti–money laundering (AML) and sanctions requirements in the United States has sparked a fresh debate between traditional banking advocates and crypto policy leaders.
The latest round of attention comes from the Washington, DC-based Bank Policy Institute (BPI), which released a new report titled “Time for a Reckoning on AML and Crypto.”
BPI Calls For US AML And Sanctions OverhaulBPI says Congress now has an opportunity to correct that imbalance through market structure legislation, framing the issue as tied not only to financial integrity but also to US national security.
The report further claims that crypto “is funding serious crimes,” stating that the intersection of cryptocurrency and suspected human trafficking intensified in 2025, with total transaction volume reaching “hundreds of millions of dollars across identified services,” which BPI describes as an 85% year-over-year increase.
BPI interprets the proposed approach as establishing stablecoin-related responsibilities similar to those applicable to banks, and it argues that a comparable model should extend to other crypto intermediaries.
BPI’s overall conclusion is that the US should not treat compliance as a competitive advantage for some firms over others. Instead, it argues, market participants should share the same baseline obligations so illicit activity does not exploit differences in legal coverage.
Crypto AML Debate Heats UpShirzad pointed out that BPI leads with Chainalysis’s $154 billion illicit figure for 2025, but he said the same Chainalysis report concludes that illicit activity remains under 1% of total on-chain volume.
He added that TRM Labs estimates the figure at 1.2%, and both firms, according to Shirzad, note that the illicit share has stayed at or below those levels for years. In his view, the numbers do not support a framing that implies crypto is uniquely or overwhelmingly dominated by criminal use.
Importantly, Shirzad did not argue that crypto regulation is unnecessary. Instead, he said none of this excuses crypto from scrutiny. He acknowledged that bad actors exploit every financial rail and that stablecoin issuers and exchanges should invest in AML efforts, sanctions screening, and intelligence sharing.
Featured image from OpenArt, chart from TradingView.com
