Senator Roger Marshall has now pulled out his support for the Digital Asset Anti-Money Laundering Act (DAAMLA).
This move is particularly remarkable since Marshall co-sponsored the bill together with Elizabeth Warren in 2022. The withdrawal, announced on July 24, leaves the controversial bill with just 18 Senate backers.
Bill’s Objective and Legislative Background
The DAAMLA, first introduced in December 2022, aims to bring the cryptocurrency sector under existing Anti-Money Laundering and Counter-Terrorist Financing regulations. The legislation seeks to classify various crypto service providers, including decentralized wallet operators, validators, and miners, as financial institutions.
Thus, these entities would be covered under the Bank Secrecy Act. This approach aims at solving what Warren described as the maneuverability which rogue nations, tyrants, drug cartels, and human traffickers enjoy as they conduct illicit business through cryptocurrencies.
Nevertheless, there has been a lot of opposition to the bill. Warren further brought it back in July 2023 with an emphasis on combating misuse of virtual currencies.
However, it has been met with strong opposition from various sectors within the crypto industry. Critics argue that the bill significantly exaggerates the role of cryptocurrencies in facilitating terrorism and criminal activities.
Industry Reaction and Implications
The Chamber of Digital Commerce, a prominent crypto advocacy group, has been vocal against the DAAMLA. In February, the group urged the Senate Banking Committee to reject the bill, warning that it could potentially erase hundreds of billions of dollars in value from U.S. startups and severely impact American investors who legally hold cryptocurrencies.
Furthermore, the opposition was not lacking and 80 former military and national security officials formed a coalition to oppose the bill. They opined that it can hamper law enforcement and increase national security threats by pushing most of the cryptocurrency related business outside of the country.
In this regard, as the debate continues, Senator Elizabeth Warren who is a prospective 2024 re-electionist remains a leading advocate of the DAAMLA. On the other hand, John Deaton, a lawyer who supports cryptocurrencies, stated that he would be running against Warren as a Republican candidate. This dynamic contributes to the continuing debate regarding the future of cryptocurrency regulation in the United States.
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