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Former government officials say DAAMLA could harm US crypto industry

source-logo  blockworks.co 13 February 2024 22:15, UTC

The Blockchain Association alongside 80 former national security and military professionals on Tuesday penned another letter to Congressional leaders, this time calling for lawmakers to strike down a bill that aims to bring crypto companies under anti-money laundering policies.

In a letter sent to four Representatives and two Senators, signatories said the Digital Asset Anti-Money Laundering Act (DAAMLA) “risks our nation’s strategic advantage, threatens tens of thousands of US jobs, and bears little effect on the illicit actors it targets.”

The bill, if passed, could push digital asset firms overseas, potentially increasing liquidity in unregulated offshore exchanges, signatories added.

Tuesday’s letter is the latest in a series of correspondence between the Blockchain Association, members of Congress and former government workers.

Forty former military officials and national security professionals wrote to members of the Senate Banking Committee and the House Financial Services Committee in November to address what signatories called misconceptions about the role of digital assets and illicit finance.

“It’s clear that there is a mismatch between the assumptions about the role that digital assets play in global financial transfers and the facts on the ground,” Kristin Smith, CEO of Blockchain Association, wrote in November. “The signatories state clearly that no amount of money, whether it be gold, dollars, or digital assets should be used to fund illicit activity, but we must also be able have a reasonable conversation about the latter when it comes to proposed solutions to the problem.”

Senator Elizabeth Warren, D-Mass., who co-sponsored DAAMLA, in December said ex law enforcement and government officials are undermining bipartisan efforts to regulate the industry. Crypto companies have a “revolving door” of these ex-federal employees, Warren said in a letter to the Blockchain Association and lobbyist group Coin Center.

Sen. Warren was not a recipient of Tuesday’s letter, but signatories addressed her comments and defended their “motivations and integrity.”

“We again raise our voice, not to inject ourselves needlessly into a political world that is new to many of us, but to stand up for what our experience tells us is right,” Tuesday’s letter reads.

Co-signers on the letter include Michele Korver, head of regulatory at Andreessen Horowitz and Faryar Shirzad, chief policy officer at Coinbase. Korver previously served as the chief digital currency advisor at the Financial Crimes Enforcement Network (FinCEN).