Senator Marshall’s Exit Marks Setback for Controversial Crypto Bill

• Senator Marshall’s withdrawal reduces DAAMLA support, complicating the bill’s future.
• Critics argue that DAAMLA could harm the U.S. crypto industry and investors significantly.

Senator Roger Marshall, a Republican from Kansas, has withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), dealing a significant blow to the controversial legislation co-authored with Democratic Senator Elizabeth Warren. The move, announced on July 24, reduces the bill’s backing to 18 senators, complicating its legislative prospects.

Introduced in December 2022 and reintroduced in July 2023, DAAMLA seeks to impose stringent Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations on the cryptocurrency industry. The bill proposes classifying a broad range of crypto entities—such as decentralized wallet providers, validators, and miners—as financial institutions, thereby subjecting them to the Bank Secrecy Act.

Senator Warren argues that DAAMLA is crucial for combating the use of cryptocurrencies by “rogue nations, oligarchs, drug lords, and human traffickers” to facilitate illicit activities. Despite her position, the bill has faced robust opposition from crypto advocates and industry experts. Critics, including the Chamber of Digital Commerce, warned that the bill could undermine the U.S. crypto sector. It has the potential to erase significant value for startups. And impacting American investors adversely.

Moreover, a group of 80 former military and national security officials has cautioned against the legislation. They suggest it could drive the digital asset industry abroad and hamper national security efforts.

Support From The Crypto Community

Marshall’s withdrawal from the bill comes as Senator Warren gears up for her 2024 reelection campaign in Massachusetts. In a bid to counter Warren’s position, pro-crypto lawyer John Deaton has announced his candidacy for the Senate. He received substantial support from the crypto community. It includes a $1 million donation from the Winklevoss twins (Pro-bitcoin stance who owns 70000 bitcoins). 

The shifting political dynamics underscore the contentious debate over cryptocurrency regulation in the U.S. and highlight the evolving landscape of legislative support for digital assets. It has significant implications for future policy decisions.

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