Concerns Rise as New Law Grants U.S. President Broad Power over Digital Assets
Summary:
Recently, a law granting the U.S. President extensive authority over digital assets has sparked concern in the digital currency community. The breadth of the law could impose restrictions compelling users to migrate to KYC compliant, permissioned blockchain networks. Critics, including Scott Johnsson, a noted authority in digital finance, suggest these changes may serve as an effort to dominate the digital currency space under the guise of combating terrorism. This development follows alleged legislative additions from Sen. Mark Warner, pulled from the Terrorism Financing Prevention Act, introduced in December 2023.
In a recent development, the President of the United States has been granted broad authority to restrict the use of digital currencies, a move that has stirred considerable apprehension in the digital currency community. Scott Johnsson, a noted authority in the world of digital finance, voiced his disapproval of the law's extensive provisions on June 6, expressing that it paints an ominous picture of the President being given the capability to ban individual-level usage of any digital contract found by the Secretary of Treasury to be contributed, operated, or accessible by an offender of overseas sanctions. The repercussions of this are potentially staggering, with the suggestion that users may likely be forced into Know Your Customer (KYC) regulated systems.
Looking at the case of Nigeria's sought justification for prosecuting an executive from Binance even in the face of American lawmakers' critiques points out the ongoing complexity in the space. In addition, Sen. Mark Warner was noted by a digital asset user for subtly introducing legislative pieces on June 5 meant to enact the debated expansive powers presented to the US president concerning digital currencies.
The newly formed law clearly outlines what falls under "digital assets," which includes anything of value that has been digitally represented and is safe-kept on a blockchain. Communication protocols, smart contracts, or any other software deployed using cryptographic security are also encompassed, providing an avenue for traders to exchange digital assets in good faith.
Amid predictions of a delayed crypto regulation due to the forthcoming general elections, this law comes into play and grants the President the authority to halt transactions between US citizens and external organizations noted for backing terror outfits. This extends to imposing rigorous stipulations on overseas financial institutions holding accounts in the US, especially if they are detected to be aiding any such transactions.
Johnsson's breakdown of the law suggests that its overarching scope could potentially force users to migrate to KYC compliant, permissioned blockchain networks, thereby restricting them to strictly regulated chains. He asserts that this development could be viewed as a hidden attempt to dominate the digital currency arena under the guise of anti-terrorism measures.
Interestingly, the constituents facilitating these presidential powers, as alleged to be included by Sen. Warner, are derived from the Terrorism Financing Prevention Act. Introduced in a December 2023 announcement, this Act gifted the US Treasury Department with the ability to address, "emerging threats involving digital assets."
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Published At
6/6/2024 12:04:09 PM
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