The Blockchain Association, a prominent voice in the crypto community, has raised serious concerns over US Senator Elizabeth Warren’s proposed legislation, the Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA).
In a second letter addressed to key congressional committees, the association, joined by 80 signatories with backgrounds in national security and military service, expressed apprehension about the potential ramifications of the bill.
Blockchain Association Concerned About Elizabeth Warren’s Crypto Bill
This latest correspondence follows an initial letter sent in November 2023, which featured 40 signatories from similar backgrounds. The Blockchain Association’s intensified effort underscores the gravity with which it views Senator Warren’s proposed legislation.
The Blockchain Association argues that DAAMLA threatens America’s strategic interests and economic health. It believes the bill risks the nation’s competitiveness and could endanger thousands of US jobs. Moreover, the association contends that DAAMLA’s efficacy in combating illicit activities within the crypto market is dubious at best.
“Sen. Warren’s DAAMLA legislation, however, would inadvertently hinder law enforcement and national security efforts by driving the majority of the digital asset industry overseas. This shift could also lead to increased liquidity in unregulated off shore exchanges and a loss of valuable expertise and visibility for the US in the blockchain realm. Further, this legislation, if implemented, will have no meaningful effect on the foreign illicit actors it targets,” the Blockchain Association wrote.
One particularly contentious aspect of DAAMLA is its inclusion of Bitcoin miners and validators of other blockchains. These entities will be responsible for adhering to Know-Your-Customer (KYC) and Bank Secrecy Act (BSA) regulations. Many industry experts argue that such a regulatory approach is impractical, given the decentralized nature of blockchain technology.
While Senator Warren has garnered support from 19 co-sponsors, including several fellow Senators, the Chair of the Senate Banking Committee, Senator Sherrod Brown, has yet to endorse the bill or any similar legislation. As the committee’s Chair, Brown wields considerable influence over whether crypto-related proposals advance to the full Senate for consideration.
Besides the Blockchain Association’s efforts, national security figures have discussed cryptocurrency’s strategic value. Notably, in December 2023, US Space Force Engineer Jason Lowery recommended the Defense Innovation Board explore Bitcoin’s role in enhancing national cybersecurity. His unique proposal from his MIT master’s thesis in March suggests accumulating Bitcoin as a defensive strategy.