In a notable shift within U.S. legislation, Senator Roger Marshall, a Republican from Kansas, has withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), a bill he co-authored with Democratic Senator Elizabeth Warren. This move, recorded on July 24, poses a significant setback for the bill, which seeks to strengthen anti-money laundering (AML) regulations in the cryptocurrency industry.
Marshall’s Withdrawal Impacts DAAMLA’s Prospects
With Marshall’s withdrawal, the DAAMLA is left with the backing of 18 senators. Introduced in December 2022, the bill aims to impose strict AML and Know Your Customer (KYC) requirements on digital asset service providers, including miners, validators, and decentralized wallet providers. DAAMLA seeks to bring the crypto sector under existing financial regulations, such as the Bank Secrecy Act, to curb illicit cryptocurrency activities.
Despite its intentions, the bill has faced strong opposition from the crypto industry, which argues that its stringent regulations would hinder innovation and drive the industry overseas. Senator Warren, a vocal critic of the crypto industry, maintains that the bill is essential to prevent cryptocurrencies from being exploited by bad actors. She reintroduced the bill in July 2023 with support from major financial institutions like Bank of America and Citibank, advocating for expanded AML frameworks to cover digital assets.
Industry Concerns and Legislative Challenges
The Blockchain Association, representing U.S. crypto interests, has raised concerns that the bill could undermine the nation’s strategic advantage, threaten jobs, and have minimal impact on illicit activities. In February, a coalition of 80 former military and national security professionals joined the Blockchain Association in warning that the bill could push the digital asset industry abroad, thereby hindering law enforcement and national security efforts.
Crypto advocates have celebrated Marshall’s withdrawal as a victory. Perianne Boring, CEO of the Digital Chamber of Commerce, called it a “massive victory” for the community, highlighting the rarity of a senator withdrawing support for their own bill.
Senator Warren’s Continued Support and Broader Political Implications
Despite the setback, Senator Warren, seeking her fourth term, continues to champion the DAAMLA as part of her broader campaign to build an “anti-crypto army.” Her stance contrasts with former President Donald Trump’s recent pro-crypto position, which has garnered significant support from industry figures such as Kraken founder Jesse Powell and the Winklevoss twins. This shift reflects a broader change within the Republican Party, which has incorporated pro-crypto policies into its platform for the 2024 elections.
Meanwhile, the Biden Administration’s approach to crypto regulation remains uncertain. Vice President Kamala Harris, endorsed by President Biden as the Democratic nominee for the upcoming election, has not clearly articulated the party’s future stance on crypto.
Recently, Warren called for stringent AML measures against foreign-owned U.S.-based crypto mining operations, citing environmental and national security risks. At a Senate Committee hearing, she highlighted the dangers posed by these mining facilities, many of which are owned by foreign entities, primarily Chinese nationals. Her anti-crypto stance has made her unpopular within the crypto community, prompting significant financial contributions from Gemini’s co-founders Tyler and Cameron Winklevoss to support candidates opposing her.
As the debate over DAAMLA continues, the positions of key legislators and the evolving political landscape will significantly influence the future of cryptocurrency regulation in the U.S.
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