The US crypto bill has faced a significant setback as Republican Senator Roger Marshall announced his withdrawal of support for the Digital Asset Anti-Money Laundering Act (DAAMLA), on the 24th of July. This move has left the controversial bill with only 18 remaining supporters. TurkishNY Radio reports that this development could mark a turning point in the ongoing debate surrounding the regulation of digital assets in the United States.
US Crypto Bill: A Controversial Legislative Effort
Introduced in December 2022, the DAAMLA aimed to integrate the crypto industry into the existing Anti-Money Laundering (AML) and counter-terrorism financing frameworks. Senator Elizabeth Warren, a co-author of the bill and a vocal critic of the cryptocurrency sector, argued that digital assets were being exploited by “rogue nations, oligarchs, drug lords, and human traffickers” to launder illicit funds. The US crypto bill sought to categorize entities such as decentralized wallet providers, validators, and miners as financial institutions subject to the Bank Secrecy Act.
Despite its intentions, the US crypto bill has been met with strong opposition from various sectors. Crypto advocates argue that the legislation overstates the role of digital assets in illegal activities and threatens to stifle the growing US crypto industry.
The Chamber of Digital Commerce (CDC), a prominent crypto advocacy group, has been particularly vocal in its criticism, urging the Senate Banking Committee to dismiss the bill. The CDC warned that passing the US crypto bill could “erase hundreds of billions of dollars in value for U.S. startups” and harm the investments of Americans who legally hold cryptocurrencies.
The reintroduction of the DAAMLA to the Senate in July 2023 further intensified the controversy. In addition to the CDC, a coalition of 80 former US military and national security officials expressed their concerns. In a letter dated February 13, they cautioned lawmakers that the US crypto bill might inadvertently hinder law enforcement efforts and escalate national security risks by driving the digital asset industry abroad.
US Crypto Bill: Political Ramifications and Broader Implications
Senator Warren, who is seeking reelection in 2024, continues to champion the US crypto bill despite mounting opposition. Her campaign has drawn a challenger in pro-crypto lawyer John Deaton, who has announced his Republican candidacy with the intention to unseat Warren. This political battle underscores the broader implications of the US crypto bill and its impact on the regulatory landscape.
Adding to the complexity, a coalition of seven US states has come together to challenge the Securities and Exchange Commission’s (SEC) regulation of cryptocurrency.
Led by Iowa Attorney General Brenna Bird, the states have filed an amicus brief arguing that the SEC’s attempt to regulate cryptocurrencies constitutes a “power grab” that would stifle innovation and exceed the agency’s authority. The coalition includes Arkansas, Indiana, Kansas, Montana, Nebraska, and Oklahoma.
Earlier this year, SEC Commissioner Hester Peirce acknowledged the regulatory challenges facing the industry. Known for her crypto-friendly stance among the SEC’s five commissioners, Peirce stated, “If we had clearer rules, you could focus on building.” Her comments reflect the broader sentiment among industry participants who are concerned about the regulatory uncertainty surrounding the US crypto bill.
Last week, the SEC closed its three-year investigation into Hiro Systems. The agency’s conclusion of the investigation comes just a day after it closed a separate case involving stablecoin issuer Paxos, marking another instance where the regulatory body has opted not to pursue enforcement actions against crypto entities. These developments highlight the ongoing tension between regulatory efforts and industry growth.
The withdrawal of Senator Roger Marshall’s support for the US crypto bill represents a major development in the ongoing debate over cryptocurrency regulation. As the bill’s future remains uncertain, the controversy surrounding its potential impact continues to grow. TurkishNY Radio will keep you updated on the latest developments as the debate over the US crypto bill unfolds.
