Sen. Elizabeth Warren’s (D-Mass.) Digital Asset Anti-Money Laundering Act (DAAMLA) of 2023 is again facing pushback from the crypto industry, this time in the form of a letter from the Blockchain Association, an industry group focused on advancing cryptocurrency.
On Tuesday, the group published an open letter to lawmakers signed by 80 former military and national security professionals with a background in digital assets, claiming that 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.”
The thrust of DAAMLA is to enact new know-your-customer and anti-money-laundering requirements on crypto actors like validators and miners in an effort to crack down on illicit finance. The letter claims that it would “inadvertently hinder law enforcement and national security efforts by driving the majority of the digital asset industry overseas.”
It’s a follow-up to a letter the association sent last month that also critiqued the legislation.
Limited Impact
But aides on Capitol Hill who spoke to Unchained said that these sorts of letters largely amount to saber rattling and posturing, and are unlikely to change policy outcomes.
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“With letters, if it was meant for the person it’s addressed to, it would be sent privately,” said one Republican aide who asked to remain anonymous.
These kinds of letters are often used by groups to signal to the various industries they represent that they are taking the issues seriously and see how their messaging around a bill is playing out in the court of public opinion.
Lawmakers are guilty of using this kind of tactic as well. For example, Sen. Warren published a letter in December 2023 critiquing the revolving door of crypto industry groups, asking how many former members of the military and members of Congress they’d hired.
“So many of these letters get sent on both sides,” said a senior Democratic Senate aide who asked to remain anonymous. “Representatives don’t always read them. Sometimes staff will just summarize them but there is a recognition that they are just the tip of the iceberg and the real negotiating happens behind the scenes.”
The Republican aide also highlighted that letters actually have to be seen to have an impact, and be followed up on to make sure they get in front of the right people.
“That means flagging it for key stakeholders and their staff as well as activating coalition members for follow-ups with individual lawmakers,” they said.
The public back-and-forth does make for headlines, but it also can inflame and entrench groups in the positions they were already inclined toward. While public letters can offer incremental suggestions, they’re unlikely to push a lawmaker to abandon legislation wholesale. It’s unlikely that Sen. Warren will step back from her critiques of crypto, for example.
“It’s a similar dynamic to hearings,” said another Democratic aide. “Taking a strong public stance can play well for a constituency, but it can also lead to breakdowns in communication down the line.”
