Republican Senator Withdraws Support for Elizabeth Warren’s Anti-Cryptocurrency Bill

United States Senator Roger Marshall, a Republican, has officially withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), the high-profile anti-cryptocurrency bill he co-authored with Democratic Senator Elizabeth Warren in 2022. Marshall’s withdrawal, announced on July 24, reduces the number of senators supporting the bill to 18, as noted in official congressional records.

Marshall withdrew his co-sponsorship of the bill on July 24. Source: US Congress

Introduced in December 2022, the DAAMLA bill aimed to impose stringent anti-money laundering measures on the cryptocurrency industry. Senator Warren, an outspoken critic of cryptocurrencies, has stated that the digital asset is being used by “rogue states, oligarchs, drug lords, and human traffickers… to launder billions in stolen funds.”

The bill aimed to integrate the cryptocurrency industry into the existing framework used to combat money laundering and terrorism financing. It proposed classifying various cryptocurrency service providers, including decentralized wallet operators, validators, and miners, as financial institutions. These entities would therefore be required to comply with the Bank Secrecy Act.

In July 2023, Senator Warren reintroduced the DAAMLA bill to the Senate, continuing its focus on curbing the illegal use of cryptocurrencies. However, the legislation has been met with significant criticism from both cryptocurrency organizations and individuals. Critics say the bill exaggerates the extent to which cryptocurrencies are used for illegal activities and fear it could have a major impact on the U.S. cryptocurrency industry.

Criticisms and concerns

Several industry groups have expressed strong opposition to DAAMLA. On February 20, the Chamber of Digital Commerce, a prominent U.S. cryptocurrency advocacy group, urged the Senate Banking Committee to reject the bill. The group argued that the bill would “wipe out hundreds of billions of dollars in value from U.S. startups and decimate the savings of countless Americans” who have legally invested in cryptocurrencies.

In addition, on Feb. 13, a coalition of 80 former military and national security officials expressed concerns in an open letter , warning that the bill could complicate law enforcement and increase national security risks by “driving much of the digital asset industry overseas.”

Political consequences

Senator Elizabeth Warren, who is running for re-election in 2024 to represent Massachusetts, continues to be a prominent advocate for strict cryptocurrency regulation. In response to the political situation, pro-crypto lawyer John Deaton announced his candidacy as a Republican on Feb. 20, aiming to challenge Warren in the upcoming election.

Aspect	Details
Introduction to the Act	December 2022 by Senators Warren and Marshall.
Intention	Address the illegal use of cryptocurrencies for money laundering and terrorism financing.
Key provisions	Classifies various crypto service providers as financial institutions; mandates compliance with the Bank Secrecy Act.
Recent Activities	Senator Marshall withdrew his support on July 24, 2024.
Criticism	Exaggerates the role of cryptocurrencies in illegal activities; potentially negative impact on the US cryptocurrency industry.
Industry Reactions	The Chamber of Digital Commerce and former officials have expressed strong opposition.
Political context	Senator Warren is running for re-election against pro-cryptocurrency lawyer John Deaton.

Senator Roger Marshall’s withdrawal from the DAAMLA bill underscores the ongoing debate and opposition surrounding cryptocurrency regulation. Supporters of the bill, including Senator Elizabeth Warren, argue it is necessary to combat illegal activities, while critics say it oversteps its authority and could harm the U.S. cryptocurrency sector. As political and industry responses continue to evolve, the future of cryptocurrency legislation remains uncertain.

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