Republican Senator Roger Marshall has recently pulled his support for the Digital Asset Anti-Money Laundering Act (DAAMLA). He co-author this controversial bill with Democrat Senator Elizabeth Warren. On July 24, Marshall officially withdrew as a cosponsor, leaving 18 senators still backing the bill, according to the official Congress directory.
Marshall and Warren initially introduced the DAAMLA in December 2022, with the latter claiming that cryptocurrencies were being misused by “rogue nations, oligarchs, drug lords, and human traffickers” to launder billions in stolen funds. The measure aims to bring the crypto sector under current Anti-Money Laundering (AML) and counter-terrorism funding structures.
One of the bill’s most controversial aspects is its classification of a broad range of crypto service providers, including decentralized wallet providers, validators, and miners, as financial institutions. This classification would expose them to the strict Bank Secrecy Act compliance requirements.
Massive Criticism
Several crypto businesses and individuals have objected to the bill. They feel that the legislation greatly overstates the part cryptocurrencies play in illicit activity and may restrict the growing US crypto sector.
The Blockchain Association, a non-profit focused on the sector’s development, voiced its concerns in February 2023, stating that the proposed regulation could force crypto companies abroad. Echoing this view, the US-based Chamber of Digital Commerce (CDC) urged the Senate Banking Committee not to take DAAMLA into account. The bill may wipe hundreds of billions of value from US businesses and destroy the investments of many Americans who have lawfully invested in cryptocurrency, the CDC cautioned.
On February 13, a group of eighty former military and national security officers also wrote senators warning against the DAAMLA. They claimed the measure would impede law enforcement and aggravate national security issues.
Reintroduction of the DAAMLA
Senator Warren reintroduced the DAAMLA to the US Senate in July 2023, continuing to target the illicit use of crypto assets for money laundering and terrorism financing.
Warren’s opposition to cryptocurrencies is well-documented. In 2021, she described decentralized finance (DeFi) as the most dangerous part of the crypto ecosystem, a statement that garnered significant criticism from the industry.
Senator Warren is running for reelection in 2024 to represent Massachusetts. Pro-crypto lawyer John Deaton has announced his intention to challenge Warren, running as a Republican. He has support from prominent figures in the crypto space, including Gemini co-founders the Winklevoss twins and Ripple CEO Brad Garlinghouse.
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