Republican Senator Roger Marshall has withdrawn support for the Digital Asset Anti-Money Laundering Act. There are now 18 senators still backing the controversial bill co-authored with Senator Elizabeth Warren. Meanwhile, Warren recently voiced her concerns about foreign-owned crypto mining operations posing national security risks. Other political figures are embracing the crypto industry as Coinbase appointed three new board members, including former Clinton strategist Chris Lehane.
Warren’s Anti-Crypto Bill Loses Support
Republican Senator Roger Marshall has withdrawn his support for the Digital Asset Anti-Money Laundering Act, a controversial bill he co-created with Democrat Senator Elizabeth Warren in 2022. Marshall's withdrawal as a cosponsor on July 24 leaves 18 senators still backing the legislation, according to the official Congress directory.
The bill was introduced in December of 2022, spearheaded by Senators Marshall and Warren, and aims to integrate the crypto industry within existing Anti-Money Laundering and counter-terrorism financing frameworks. Senator Warren claimed that cryptocurrencies are being exploited by rogue nations, oligarchs, drug lords, and human traffickers to launder billions in stolen funds.
The bill declares various crypto service providers, like decentralized wallet providers, validators, and miners as financial institutions. This then subjects them to the Bank Secrecy Act's terms.
Senator Warren reintroduced the DAAMLA bill to the US Senate in July of 2023, targeting the illicit use of crypto assets for money laundering and terrorism financing. However, the bill has faced a lot of backlash from several crypto fans and organizations who argue that it exaggerates the role of crypto in funding illegal activities and could severely impact the US crypto industry.
The Chamber of Digital Commerce, a US-based crypto advocacy group, urged the Senate Banking Committee on Feb. 20 not to consider the DAAMLA bill as it could erase hundreds of billions of dollars in value for US startups and devastate the savings of countless Americans who have legally invested in crypto.
Additionally, on Feb. 13, a group of 80 former military and national security officials wrote to lawmakers, warning that the bill will prevent law enforcement efforts and heighten national security concerns by pushing the digital asset industry overseas.
Warren Warns Senate of Crypto Mining Dangers
Elizabeth Warren also once again voiced her concerns about crypto, this time warning a Senate committee about the potential dangers posed by foreign-owned cryptocurrency mining operations on American soil. At a hearing of the Senate Committee on Banking, Housing, and Urban Affairs on July 25, Democrat Senator Warren shared some of her views on foreign-owned crypto miners. She now claims they pose a national security threat.
Warren argued that foreign companies building crypto mining facilities in the US are a “disaster for the environment” and can also pose national security risks. She stated that these facilities are loud, hot, and consume a huge amount of electricity, which can potentially crash the power grid.
Her comments targeted a specific Chinese-owned facility, MineOne, which is located close to a strategic missile base in Wyoming. The facility was ordered to be removed by President Biden in May.
During the hearing, Senator Jacky Rosen asked about the general concern regarding foreign crypto mining facilities in the US. Warren responded that these facilities could be used for espionage, posing an obvious national security risk. She also pointed out that foreign adversaries might use crypto mines to spy on US military operations and that their connection to the energy grid could make the US vulnerable to targeted blackouts and cyberattacks.
Warren also went on to criticize digital assets, and stated that foreign entities have been secretly buying mining facilities using cryptocurrency to bypass traditional banking systems and Anti-Money Laundering rules. She claimed that this allows US-based crypto mines to secretly send millions of dollars back to China. Warren subsequently believes that it is time for the US to pass laws to address these issues.
While Warren's concerns shed some light on the potential risks of foreign-owned crypto mining operations, it is well documented that crypto mining can actually benefit energy grids by balancing load and increasing renewable electricity capacity. Research published in November of 2023 indicated that crypto mining’s inherent interruptibility and swift load response capabilities could improve power grid flexibility.
However, the Biden administration has ordered a crackdown on the crypto mining industry, following China's lead in its ongoing fight against the industry.
Coinbase Adds Former Clinton Strategist to Board
While politicians like Warren are pushing against the crypto industry, others are taking a different approach. Cryptocurrency exchange Coinbase has strengthened its board of directors with three new appointments, including a senior OpenAI executive who previously served as a political strategist for US President Bill Clinton in the 1990s.
On July 25, Coinbase announced the appointment of Chris Lehane as one of 10 directors on its board. Lehane was Clinton’s strategist in 1992, and played a key role in helping Airbnb become a legal operator in all 50 US states and globally. He currently serves as Vice President of Public Works at OpenAI. Coinbase stated that Lehane will provide strategic counsel as the company aims to integrate on-chain technology into the financial system.
Lehane was already a member of Coinbase’s Global Advisory Council before joining the board. Joining him are Christa Davies, the former chief financial officer of management consulting firm Aon, and Paul Clement, a former partner at law firm Clement and Murphy and a former solicitor general for the Bush administration.
Davies, who also served as chief financial officer at Microsoft’s platforms and services division, will be part of Coinbase’s audit and compliance committee, supporting the firm’s financial operations. Clement, an experienced attorney who has argued over 100 cases before the US Supreme Court, will assist Coinbase’s audit and compliance committee, and will help with the company’s legal battle with the SEC.
All three new board members share the belief that digital assets can boost financial inclusion, especially for marginalized groups.
Bitcoin Expert Criticizes Financial Institutions at Bitcoin Conference
Author and Bitcoin expert Jimmy Song recently spoke at the 2024 Bitcoin event in Nashville, where he criticized some of the topics that were discussed on the first day, including the banking sector, institutional investment, and the introduction of exchange-traded funds in the US.
Song believes that these developments are only efforts by multinational corporations and the administrative state to co-opt the Bitcoin movement. He also placed a lot of emphasis on the importance of liberty, freedom, and self-sovereignty, values he believes are foundational to both America and Bitcoin. Song specifically criticized financial institutions like BlackRock for diverting from these principles.
Fellow panelist Luke Rudkowski supported Song's views, and talked about Bitcoin's potential to expose government-created problems and empower people independently of state structures.
The warnings from Song's panel came at a time of increasing state surveillance and attacks on free speech in the US. In April of 2024, whistleblower Edward Snowden warned that the NSA was close to taking over the internet due to the reapproval of warrantless spying under FISA Section 702, which was signed into law by President Joe Biden shortly after Snowden's alert.
Decentralized technologies like Bitcoin are seen as revolutionary for removing the state's control over money. Other crypto technologies and digital assets also create more freedom by countering state surveillance. In an April 2024 interview with Tucker Carlson, Telegram founder Pavel Durov explained that the government's surveillance tendencies will push developers to create new communication devices inspired by crypto wallets to evade state monitoring.
