Key Takeaways
- Bill targets illicit uses of crypto assets for money laundering and terrorist financing.
- Crypto organisations claim the bill exaggerates crypto’s role in funding illicit activities and could harm the U.S. crypto industry.
Senator Roger Marshall (R-Kan.) has withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), a controversial bill he co-sponsored with Senator Elizabeth Warren (D-Mass.) in 2022. Marshall pulled his support on July 24, leaving 18 senators still backing the legislation.
Warren and Marshall introduced the bill in December 2022 to tighten U.S. anti-money laundering rules for digital assets. “The crypto industry should follow common-sense rules like banks, brokers, and Western Union,” Warren said at the time. The bill was reintroduced in July 2023 with support from the Bank Policy Institute, which represents major banks like Bank of America and Citibank.
DAAMLA aims to extend know-your-customer and anti-money laundering verification to digital asset service providers, miners, validators, and other participants. It also proposes a new review process by the Treasury, Securities and Exchange Commission, and Commodity Futures Trading Commission to enforce Bank Secrecy Act compliance on digital asset entities.
The Blockchain Association, representing the U.S. crypto industry, expressed concerns over the bill in January and February. One letter, co-signed by 80 former military and national security professionals, warned that the bill “risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets.”
The association added that Warren’s legislation would “inadvertently hinder law enforcement and national security efforts by driving the majority of the digital asset industry overseas.”
In response, Warren accused the Blockchain Association of trying to “undermine bipartisan efforts” to tackle crypto’s role in terrorist financing. She reintroduced the DAAMLA bill in July 2023, targeting the illicit use of crypto for money laundering and terrorism financing.
Crypto organizations have criticized the legislation, claiming it exaggerates crypto’s role in funding illicit activities and could harm the U.S. crypto industry. On February 20, the Chamber of Digital Commerce urged the Senate Banking Committee not to consider the bill, arguing it would “erase hundreds of billions of dollars in value for U.S. startups and decimate the savings of countless Americans” who have legally invested in crypto.
A week earlier, 80 former military and national security officials warned that the legislation would drive the digital asset industry overseas and hinder law enforcement.
