If enacted, the law would give the president the authority to restrict transactions between U.S. residents and foreign companies flagged as linked to terrorism.
Members of the cryptocurrency community are expressing significant concern about new legislation proposed by U.S. Senator Mark Warren to combat terrorism and other illegal activities.
On Thursday, Scott Johnsson, a financial lawyer and strong advocate for the emerging cryptocurrency economy, highlighted the implications of this new law for social media. According to him, the bill, which has already been submitted to the Senate for consideration, would give the president the power to block access to digital assets.
Borrowing elements from existing law
Johnsson expressed concern about suggested.
“It is difficult to understand whether the President does not intend to grant a ban at the user level to any protocol or smart contract that the Secretary of the Treasury deems ‘controlled, operated, or available’ by foreign sanctions. violator,” Johnson wrote.
Johnsson’s concerns were sparked by a post by
The bill, introduced by U.S. Senators Mitt Romney, Mark Warner, Mike Rounds, and Jack Reed in December 2023, would allow the Treasury Department to ” Transactions with “foreign digital asset transaction facilitators” can be blocked.
Financial lawyers believe the addition of the new provisions could spell trouble for the cryptocurrency sector and could give the Treasury the power to decide the future of the industry and potentially undermine decentralized finance.
Implications for the Cryptocurrency Sector
Johnsson’s theory is that the law’s broad applicability could limit users to only regulated blockchains, with know-your-customer (KYC) compliance and migration to permissioned blockchain networks.
Johnson also suggested that the proposed legislation could be part of a broader U.S. strategy to control the cryptocurrency economy under the guise of counter-terrorism measures.
The proposed law defines crypto assets as digital representations of value secured by cryptographic ledgers, including communication protocols and smart contracts. The contents are as follows:
“(…) any communication protocol, smart contract or other software deployed using a distributed ledger or similar technology (…) and (…) a mechanism through which users can interact and agree to the terms of trading digital assets; “It provides.”
If enacted, the law would give the president the authority to restrict transactions between U.S. residents and foreign companies flagged as linked to terrorism.
Additionally, U.S. financial institutions face strict conditions under the law if they are found to be facilitating such transactions.
Political Climate and Cryptocurrency Legislation
Meanwhile, the implementation of the proposed law comes at a time of serious political conflict in the United States.
On the one hand, there have been legislative measures favorable to cryptocurrencies, such as the 21st Century Financial Innovation and Technology Act, which received bipartisan support.
Recently, Congress passed the SEC’s Staff Accounting Bulletin No. We passed a bill targeting 121 (SAB 121). The bill would ban banks from holding digital assets and require companies that store cryptocurrencies to record customers’ cryptocurrency holdings as liabilities on their balance sheets.
But after vetoing the bill, President Joe Biden concluded that it does not support the success of the American people. According to him, his administration “will not support measures that jeopardize the well-being of consumers and investors.
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