'Disastrous' provision in new US law, warns crypto advocates
A new bill proposed by House leaders may pose privacy and due process concerns, according to Jerry Brito, executive director of non-profit policy advocacy group Coin Center.
This bill would bypass existing checks and balances on the Treasury Secretary's surveillance authority, including of crypto firms, according to the Coin Center director.
Earlier this week, the U.S. House of Representatives passed the America COMPETES Act, which would allow the Treasury Secretary to block or impose conditions on any transactions or accounts which are involved in money laundering.
According to a blog post from Coin Center, industry think tanks are warning that “In brief, it would hand the Treasury Secretary unchecked discretion to forbid financial institutions (including cryptocurrency exchanges) from offering their customers access to cryptocurrency networks. The Secretary may not use this discretion immediately, but it is not power the Department should have.”
According to a tweet from Brito on Wednesday - To start with, Treasury must conduct a public rule-making process before imposing any restrictions. A surveillance special measure can be imposed by the secretary with a simple order, but its duration cannot exceed 120 days and must be accompanied by public rulemaking.
The America COMPETES Act cited the use of cryptocurrencies in ransomware attacks on U.S.-based organizations.
According to Brito and Coin Center research director Peter Van Valkenburgh, the Treasury Department's removal of restrictions from its "special measures" authority could have major consequences for individuals and companies operating in the crypto space.
Legislators are already working to prevent the provision from becoming law. One Republican lawmaker, Ted Budd of North Carolina, introduced an amendment that would simply remove it entirely. But even if it passes the House, it is unclear if it will become law.
The House and Senate versions of the bill must be passed before a conference committee can consider the bill. Also, the Senate version of the bill, the Endless Frontier Act, lacks a counterpart.
CBW - External Analyst