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Republican Party Makes Efforts to Be Crypto-Friendly! Party Members Take Initiative to Withdraw from Anti-Encryption Bill DAAMLA

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Republican Party Makes Efforts to Be Crypto-Friendly! Party Members Take Initiative to Withdraw from Anti-Encryption Bill DAAMLA

United States Republican Senator Roger Marshall withdrew his co-sponsorship for the Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA) on July 24. The DAAMLA bill proposed by Roger Marshall was widely seen as unfriendly towards cryptocurrencies. Following former President Trump's strong support for cryptocurrencies earlier this year, he also no longer supports DAAMLA.

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Table of Contents

What is DAAMLA? Bipartisan Anti-Crypto Legislation Endorsed by Both Parties

Co-sponsored by Republican Senator Roger Marshall and Democratic Senator Elizabeth Warren, the 2022 Digital Asset Anti-Money Laundering Act was introduced in December 2022. Marshall stated, "Following the 9/11 terrorist attacks in 2001, our government implemented meaningful reforms to help banks remove bad actors from the U.S. financial system. Applying similar policies to cryptocurrency exchanges will prevent digital assets from being abused to fund illegal activities without restricting law-abiding American citizens' access."

The bill includes:

  1. 1. Expansion of Bank Secrecy Act (BSA) responsibilities (including KYC requirements) to digital asset wallet providers, miners, validators, and other currency service businesses
  2. Identity verification: Requires banks and money service businesses (MSBs) to verify the identities of customers and transaction counterparts, maintain records, and report digital asset transactions involving non-custodial wallets or wallets held in jurisdictions not compliant with the BSA
  3. Prohibition of enhanced anonymity technologies: Prohibits financial institutions from using technologies such as coin mixers that enhance anonymity
  4. Enhanced BSA compliance enforcement: Proposes anti-money laundering and counter-terrorist financing (AML/CFT) compliance checks and review processes
  5. Expansion of Foreign Bank Account Reporting Rules: Includes digital assets, requiring U.S. individuals conducting digital asset transactions valued over $10,000 through one or more offshore accounts to submit FBAR (Foreign Bank and Financial Account Report) to the IRS.
  6. Digital Asset ATM Regulation: Requires owners and operators of digital asset ATMs to regularly submit and update the physical addresses of their owned or operated ATMs and verify customer identities.

In July 2023, Elizabeth Warren reintroduced the DAAMLA bill to the Senate, with Marshall still as a co-sponsor.

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Blockchain Industry Opposes DAAMLA Citing "National Security Reasons"

On February 14, 2024, the U.S. Blockchain Association wrote a letter to Congress urging legislators not to pass DAAMLA. The letter mentioned that the bill would hinder future innovation in digital assets, enhance the government's monitoring capability over citizens, and relinquish America's advantage in digital asset technology competition. The letter received support from 80 former military and national security officials.

2024 Elections Approaching! Republicans Strongly Support Cryptocurrency

In July, the U.S. Republican Party released its 2024 party platform, mentioning in Chapter Three that "The Republican Party will terminate the Democratic Party's illegal and un-American crackdown on cryptocurrency and oppose the establishment of a central bank digital currency (CBDC). We will defend the right to mine Bitcoin, ensure every American has the right to autonomously manage their digital assets, and conduct transactions without government surveillance and control." On July 22, crypto-friendly Republican Senator Cynthia Lummis announced plans to introduce a new bill to designate Bitcoin as a U.S. reserve asset.

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While Roger Marshall previously expressed concerns that cryptocurrencies would exacerbate drug trafficking on the dark web, he withdrew his drafted anti-crypto legislation ahead of the election as the Republican Party strongly backed cryptocurrencies. Despite Marshall's withdrawal, 18 senators still supported the bill, including 16 Democrats, one Independent, and one Republican. The upcoming election is significantly altering the stance of American politicians on crypto, with even the post-switch Democratic camp reportedly actively consulting on crypto issues.

Additional Resources: Check the crypto stance of U.S. politicians

Mark Cuban: Harrington's team has consulted on various crypto issues