In a surprising turn of events, United States Republican Senator Roger Marshall has withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), a bill he initially co-sponsored with Democratic Senator Elizabeth Warren in December 2022. This move leaves the controversial bill with 18 remaining supporters in the Senate.
Marshall’s Change of Heart
Senator Marshall’s withdrawal on July 24 signals a significant shift in the political landscape surrounding DAAMLA. The bill, reintroduced by Senator Warren in July 2023, aims to regulate the crypto industry under existing Anti-Money Laundering and Counter-Terrorist Financing frameworks. It would classify various crypto service providers, such as decentralized wallet providers, validators, and miners, as financial institutions subject to the Bank Secrecy Act.
Crypto Community Pushback
The bill has faced considerable opposition from the crypto community. Critics argue that it exaggerates the role of cryptocurrencies in illicit activities and could severely impact the US crypto industry. On February 20, the Chamber of Digital Commerce, a US-based crypto advocacy group, urged the Senate Banking Committee to reject the bill, warning it could erase significant value for US startups and harm countless American investors.
National Security Concerns
Furthermore, a group of 80 former US military and national security officials cautioned that DAAMLA could hinder law enforcement and increase national security risks by driving the digital asset industry overseas. Their concerns highlight the potential unintended consequences of the bill on both the crypto industry and national security.
Political Implications
Senator Warren, who is running for reelection in 2024, now faces additional challenges with the DAAMLA bill losing one of its key supporters. Adding to the political tension, pro-crypto lawyer John Deaton announced his intention to run as a Republican to unseat Warren, further intensifying the debate around cryptocurrency regulation.