Blockchain Association Fires Back At Senator Warren’s New Crypto Bill

By Bitcoin News On Mar 23, 2024

Massachusetts, speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, US, on Wednesday, Dec. 6, 2023. The heads of the biggest US banks will use the hearing to make their case for watering down rule proposals they argue will harm the economy. Photographer: Ting Shen/Bloomberg

The Blockchain Association, an industry trade group representing the crypto industry in Washington D.C., sent a second letter to leadership in the House Financial Services Committee and Senate Banking Committee expressing deep concern over a bill titled the Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA). Senator Elizabeth Warren (D-Mass.) sponsored the legislation, with 19 other Senators having supported the bill as co-sponsors.

The first letter sent by the Blockchain Association in November of 2023 had 40 signatories from former U.S. military, national security and intelligence officers, while this new letter has 80 signatories from individuals with similar backgrounds. While the first letter focused on what many described as an overblown narrative around how cryptocurrency played a role 2023 Hamas-led attack on Israel, the new letter focuses on the policy aspects of Warren’s DAAMLA legislation.

According to the Blockchain Association letter, Warren’s legislation, “…risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets.” The message of the letter is also described as a response to a letter from Warren to the Blockchain Association. Warren claimed in her letter that the Blockchain Association was, “…flexing a not-so secret weapon: a small army of former defense, national security and law enforcement officials…to undermine bipartisan efforts in Congress and the Biden Administration to address the role of cryptocurrency in financing Hamas and other terrorist organizations.”

Warren was referring to how the Blockchain Association helped coordinate a visit to Capitol Hill to discuss the issues raised in their first letter back in November of last year. Coinbase as well as the think tank Coin Center also received similar letters from Warren. The Blockchain Association claims in their new letter to Warren that she, “… questioned the motivations and integrity of scores of U.S. military and intelligence veterans without addressing the substance of our arguments…”.

Massachusetts, following the weekly Democratic caucus luncheon at the US Capitol in Washington, DC, US, on Tuesday, Sept. 19, 2023. A continuing resolution unveiled this week by House Republicans would avert a government shutdown that would otherwise begin on Oct. 1. Photographer: Al Drago/Bloomberg

At a minimum, with Warren having convinced 19 other U.S. Senators to join her, that there is both an ongoing discussion in the Senate as well as momentum toward some kind of legislation on the Hill to address the illicit use of cryptocurrencies. However, the Chair of the Senate Banking Committee, Senator Sherrod Brown (D-OH), has not yet signed on to the DAAMLA or any other legislation himself. As Chair, Brown still has a great deal of power as to what kind of crypto legislation if any may move from the Senate Banking Committee to the full Senate for consideration.

The Blockchain Association letter argues that, “the Digital Asset Anti-Money Laundering Act (DAAMLA) risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets.” Part of the DAAMLA bill would consider all bitcoin miners and validators of other blockchains to be responsible for conducting Know-Your-Customer (KYC) and Bank Secrecy Act (BSA) regulations, which many in the industry say is unworkable and basically impossible because of the way the technology works.

Blockchain Association, speaking at the 2023 Policy Summit.

The Blockchain Association 2023 Policy Summit

The new letter indicates that the Blockchain Association will be coordinating another visit on the Hill in March to speak to policymakers in detail about the problems with the DAAMLA legislation. As the crypto industry expresses its concerns about the way new legislation is developing that could impact its business, these new developments would seem to indicate that the stakes are getting even higher for U.S. crypto policy going forward.

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I am a former U.S. Regulator where I served with the FDIC during the Global Financial Crisis (GFC) in finance and capital markets, with experience in safety and soundness, compliance, and bank secrecy act examinations. I also served as a consultant and compliance examiner for the Making Home Affordable Program (HAMP) – Compliance, where the U.S. Department of the Treasury would review our reports to determine how the largest mortgage servicing companies complied with the rules of the program and provided consumers the opportunity to be considered for a 40-year low-interest mortgage based on the impacts of the GFC to their family.

While at the FDIC, I provided inputs on issues impacting the largest banks and systemic risks during the GFC such as deposit run analysis, research on synthetic collateralized debt obligations and credit default swaps, compilation of the exposure of net notional derivatives in the financial system, and analysis of new programs created by the Federal Reserve Board to stabilize the economy. During this time, I became interested in the way the Government provides trust in the financial system and the various risks involved with social media’s coverage of the IndyMac bank run and what run risk looked like if individuals primarily did their banking through their personal computers or phones over the Internet.

In 2016, I entered into the blockchain industry with the Chamber of Digital Commerce as Director of Operations. I helped provide a monthly newsletter and supported various working groups in the international, federal, and state arenas for emerging technology and policy issues for cryptocurrency and blockchain. In 2017, I worked as the Policy Ambassador for ConsenSys and the Ethereum network.

After these experiences, I founded the Value Technology Foundation, a 501(c)(3) where I initially served as the CEO and also was the Chair of the Board. I am still Chairman, but also serve as the Director of Policy Innovation and Research covering the cryptocurrency industry where regulation and policy intersects with the world of digital assets and distributed ledger technology. I also do private consulting engagements for layer one distributed ledger technology protocols, digital asset technology companies, and financial institutions, with a focus on the intersection of compliance, regulation, governance and policy for digital assets offerings and guiding third-party crypto service providers on working with U.S. banks.

I am also grateful to serve as an advisor to the Bitcoin Policy Institute (BPI) where I can formulate policies and ideas that can help the U.S. be the best place to hold Bitcoin.

My undergraduate degree is from Cornell University in Government (BA, 1997) and hold an MBA with a focus on accounting at the Kogod School of Business (MBA, 2009).