US Senator Roger Marshall Withdraws Support for Elizabeth Warren’s Anti-Crypto Bill

In a surprising turn of events, Republican Senator Roger Marshall has withdrawn his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), a bill he co-sponsored with Democratic Senator Elizabeth Warren. What does this mean for the future of crypto regulation in the United States?

Marshall Withdraws Support: A Change of Heart?

Senator Roger Marshall’s decision to withdraw his co-sponsorship of the DAAMLA bill marks a significant shift. Originally introduced in December 2022, the bill aimed to tighten regulations on the crypto industry, primarily focusing on anti-money laundering (AML) and counter-terrorist financing (CTF) measures. Marshall’s withdrawal, announced on July 24th, leaves 18 senators still backing the legislation.

What is the Digital Asset Anti-Money Laundering Act (DAAMLA)?

The DAAMLA bill, championed by Senators Warren and initially Marshall, sought to bring the crypto industry under existing AML and CTF frameworks. Key provisions of the bill include:

• Defining Crypto Service Providers as Financial Institutions: This includes decentralized wallet providers, validators, and miners, subjecting them to the Bank Secrecy Act.
• Combating Illicit Use of Crypto: Targeting the use of crypto assets for money laundering and terrorist financing.

Senator Warren has stated that crypto is used by “rogue nations, oligarchs, drug lords, and human traffickers to launder billions in stolen funds.”

Why the Opposition to DAAMLA?

Despite its aims, the DAAMLA bill has faced considerable opposition from crypto organizations and individuals. Concerns revolve around the potential negative impact on the US crypto industry and the exaggeration of crypto’s role in illicit activities.

Key Arguments Against DAAMLA:

• Economic Impact: The Chamber of Digital Commerce warned that the bill could “erase hundreds of billions of dollars in value for US startups and decimate the savings of countless Americans.”
• Hindrance to Law Enforcement: A letter signed by 80 former military and national security officials argued that the legislation would hinder law enforcement and increase national security concerns by “driving the majority of the digital asset industry overseas.”

Potential Outcomes

The withdrawal of Senator Marshall adds more uncertainty to the future of DAAMLA. With increasing opposition and voices against the bill, there are a few potential outcomes:

1. The bill could be revised to address the concerns raised by the crypto industry and national security experts.
2. The bill could fail to pass the Senate, leading to a search for alternative approaches to regulating crypto.
3. The debate could continue, potentially influencing the upcoming elections and the future composition of the Senate.

What’s Next for Elizabeth Warren?

Elizabeth Warren is up for reelection in 2024. John Deaton, a pro-crypto lawyer, has announced his candidacy as a Republican, aiming to challenge Warren’s position. This sets the stage for a potentially fierce political battle centered on the future of crypto regulation.

Conclusion: A Turning Point for Crypto Regulation?

Senator Marshall’s withdrawal from the DAAMLA bill represents a pivotal moment in the ongoing debate over crypto regulation. It highlights the deep divisions and concerns surrounding current legislative proposals. As the discussion continues, the future of crypto in the US remains uncertain, with significant implications for investors, businesses, and the broader economy.