The simmering tension between the crypto industry and US regulators boils over as the Blockchain Association, a powerful industry trade group, launches a fresh salvo against Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act (DAAMLA).
Blockchain Association Fires Back At Warren’s Bill
With 80 signatories – predominantly former military, national security, and intelligence personnel – the Association vehemently opposes the bill, calling it a threat to American innovation and global competitiveness.
DAAMLA, reintroduced by Warren last July, targets the use of crypto assets for money laundering and terrorism financing. Supporters hail it as a necessary step to curb illicit activities within the largely unregulated crypto space. However, the Blockchain Association paints a different picture, arguing that the bill overstates the role of crypto in terrorism and exaggerates the threats it poses.
Senator Elizabeth Warren speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, US, on Dec. 6, 2023. Image: BLOOMBERG FINANCE LP
1/ Today, we sent a new letter to Congress, supported by a doubled 80+ coalition of former military and national security professionals urging members to reconsider support for proposed legislation that could cripple the domestic digital assets industry.https://t.co/6bSarhpVP4 pic.twitter.com/uxIqyGp1AY
— Blockchain Association (@BlockchainAssn) February 13, 2024
Their letter, addressed to leadership in the House Financial Services Committee and Senate Banking Committee, emphasizes several key concerns:
1. Misguided Narrative: The Association refutes claims that crypto played a significant role in the 2023 Hamas attack on Israel, a narrative used by Warren to justify stricter regulations. Citing industry reports, they assert that less than 1% of all cryptocurrency transactions in 2023 were associated with illegal activities.
2. Innovation Stifled: The letter warns that DAAMLA’s stringent compliance requirements would force many US crypto companies to relocate overseas, leading to a loss of American leadership, expertise, and potential economic benefits. They estimate this could threaten tens of thousands of jobs within the burgeoning industry.
3. Ineffective Abroad: They argue that the bill’s focus on US-based entities overlooks the international dimension of crypto usage. Foreign criminals could easily shift their activities to unregulated offshore exchanges, rendering DAAMLA largely ineffective in achieving its intended goals.
4. Seeking Balance: Instead of DAAMLA, the Association advocates for a “balanced approach” to crypto regulation. They propose measures that protect consumers and investors while fostering innovation and ensuring American competitiveness in the global crypto landscape. They also call for open dialogue and collaboration between the government and the industry to address evolving challenges and opportunities posed by this new technology.
Total crypto market cap at $1.9 trillion on the daily chart: TradingView.com
Blockchain Forces Mobilize Against Anti-Crypto Legislation
This clash comes amid rising tensions between the US and other countries using crypto to circumvent sanctions and finance operations. The recent Hamas attack further fueled calls for stricter regulations, particularly on targeting crypto wallets linked to such groups. Senator Warren’s office declined to comment on the matter, leaving the debate over DAAMLA’s future hanging in the balance.
With 80 voices from seasoned security professionals now joining the fray, the crypto industry has mounted a significant challenge to Warren’s proposed legislation. Whether their concerns translate into meaningful changes to DAAMLA or a completely different regulatory approach remains to be seen.
Featured image from AP File/The Providence Journal, chart from TradingView
