Crypto Analyzer

Blockchain Association Fires Back At Senator Warren’s New Crypto Bill

The Blockchain Association has voiced its deep concern over the Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA) in a second letter sent to leadership in the House Financial Services Committee and Senate Banking Committee. Sponsored by Senator Elizabeth Warren and supported by 19 other Senators, the bill is aimed at addressing the illicit use of cryptocurrencies. However, the Blockchain Association argues that the legislation “risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets.”

This response follows an earlier letter sent by the Blockchain Association in November 2023, which had 40 signatories from former U.S. military, national security, and intelligence officers. The new letter, however, has 80 signatories from individuals with similar backgrounds and focuses on the policy aspects of Warren’s DAAMLA legislation.

The Blockchain Association’s letter comes as a response to a previous letter from Warren, in which she accused the association of undermining bipartisan efforts in Congress to address the role of cryptocurrency in financing terrorist organizations. Warren pointed out that the association leveraged the support of former defense, national security, and law enforcement officials to advance its agenda.

The crux of the Blockchain Association’s argument is that the DAAMLA legislation poses significant challenges for the crypto industry. The bill seeks to hold all bitcoin miners and validators of other blockchains accountable for conducting Know-Your-Customer (KYC) and Bank Secrecy Act (BSA) regulations, which many industry experts believe is unworkable due to the nature of the technology.

The association plans to further engage policymakers by coordinating a visit to Capitol Hill in March to discuss the issues with the DAAMLA legislation in more detail. This development indicates that the stakes are getting higher for U.S. crypto policy as the industry expresses concerns about the potential impact of new legislation on its business.

While Senator Warren has garnered support from 19 other U.S. Senators for the DAAMLA bill, the Chair of the Senate Banking Committee, Senator Sherrod Brown, has not yet signed on to the legislation. As Chair, Brown holds significant power in determining what kind of crypto legislation, if any, may move from the Senate Banking Committee to the full Senate for consideration.

The ongoing debate around the DAAMLA bill reflects the broader discussions and tensions between industry stakeholders and policymakers regarding the regulation of cryptocurrencies. As the crypto industry seeks to navigate these challenges, the outcome of these debates will likely have far-reaching implications for the future regulatory landscape of the sector.

The conflicting perspectives between the Blockchain Association and Senator Warren’s DAAMLA bill underscore the complexity of regulating the evolving crypto industry and the importance of striking a balance between addressing illicit activities and preserving innovation and economic opportunities.

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