Elizabeth Warren Faces Pushback on Crypto Bill from Blockchain Group

US Senator Elizabeth Warren’s proposed Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA) has encountered substantial opposition from the Blockchain Association, a leading advocate for the crypto community. Along with 80 signatories with national security and military backgrounds, the association has voiced its concerns through a letter to key congressional committees, marking a second such initiative following an initial letter sent in November 2023.

Blockchain Group Challenges Elizabeth Warren’s Crypto Bill

The Blockchain Association’s latest outreach effort highlights the growing apprehension surrounding the potential consequences of DAAMLA. The association argues that the legislation threatens America’s strategic interests and economic well-being, suggesting it could undermine the nation’s competitiveness and jeopardize thousands of US jobs.

Furthermore, the group questions the bill’s effectiveness in curbing illicit activities within the crypto market, indicating that it might inadvertently hamper law enforcement and national security efforts by pushing the digital asset industry offshore. This migration could increase liquidity in unregulated foreign exchanges and diminish the United States’ influence and visibility in the blockchain domain.

A particularly controversial aspect of DAAMLA is its approach to regulating Bitcoin miners and validators of other blockchains, requiring them to comply with Know-Your-Customer (KYC) and Bank Secrecy Act (BSA) regulations. Industry experts have criticized this regulatory strategy as impractical, given the decentralized nature of blockchain technology.

The bill’s progression remains uncertain despite Senator Elizabeth Warren securing support from 19 co-sponsors. Senator Sherrod Brown, Chair of the Senate Banking Committee, has yet to endorse DAAMLA or similar proposals. Brown’s position is pivotal, as his support is crucial for advancing crypto-related bills to the Senate floor.

Strategic Value of Cryptocurrency and Legislative Debate

The debate over DAAMLA also encompasses discussions on the strategic value of cryptocurrency for national security. Notably, US Space Force Engineer Jason Lowery has suggested that Bitcoin could enhance national cybersecurity, proposing that the Defense Innovation Board consider accumulating Bitcoin as a defensive measure.

This recommendation, stemming from Lowery’s MIT master’s thesis, contrasts with criticisms from industry leaders who argue that digital assets are generally inefficient for evading sanctions. Figures like Paul Grewal, Coinbase’s Chief Legal Officer, have accused Elizabeth Warren of leveraging a report’s findings to further an anti-crypto agenda without a comprehensive comparative analysis.

Digital Chamber CEO Perianne Boring has similarly criticized the push for stringent crypto regulations, warning that such measures could stifle innovation and potentially cede technological leadership to international adversaries. This perspective underscores the broader implications of the regulatory debate, highlighting concerns over national security and technological advancement.

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2024-02-13 18:41