Blockchain Association, a nonprofit organization representing the interests of the U.S. crypto industry, sent a letter to Congress on Tuesday expressing concern over Senator Elizabeth Warren’s proposed bill—named the Digital Asset Anti-Money Laundering Act of 2023.
“[The bill] risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets,” said the letter, co-signed by 80 former military and national security professionals including those with background in digital assets.
Senator Warren’s proposal aims to expand Know-Your-Customer and anti-money laundering (AML) verification responsibilities to digital asset service providers, miners, validators, and other participants in efforts to close existing security loopholes in crypto—from transactions with parties such as unhosted wallets or offshore accounts.
A section of the anti-money laundering bill proposes that the Treasury, Securities and Exchange Commission, and Commodity Futures Trading Commission establish a new AML review process to enforce Bank Secrecy Act compliance on digital asset entities.
Potential consequences: Driving the crypto industry overseas
“Sen. Warren’s DAAMLA legislation, however, would inadvertently hinder law enforcement and national security efforts by driving the majority of the digital asset industry overseas,” the Blockchain Association said. The letter added that the increased compliance enforcement will result in more liquidity in unregulated offshore exchanges and an outflow of blockchain expertise from the U.S.
This is not the first time Senator Warren and the Blockchain Association were on opposing ends. Senator Warren previously said that the Blockchain Association attempts to “undermine bipartisan efforts” in addressing the role of crypto terrorist financing, after the association stated that the reporting on Hamas’s use of crypto has been “grossly overstated.”
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