A new US law grants the president unprecedented power to block access to cryptos. This legislation raises serious concerns about its broad implications and potential impact on cryptocurrency users. With this law, the President of the United States can now exercise direct control over digital transactions.
Extensive powers and implications
The new law gives the president broad powers to block access to digital assets. Scott Johnsson, an influential voice in the crypto space, sharply criticized this legislation for being far-reaching.
According to him, this law could allow the president to prohibit access to any protocol or smart contract considered non-compliant by the Secretary of the Treasury. The scope of this measure is staggering and could force users to shift to KYC (Know Your Customer) and authorized channels.
Johnsson expressed his concerns by pointing out that the law could lock users into regulated chains, thus limiting their freedom to use cryptocurrencies “ “It's hard to understand how this isn't a user-level banning power of the president,” he said, pointing to the measure's broad and potentially repressive implications.
Under this new law, the president can block transactions between U.S. persons and foreign entities. This concerns entities identified as supporting terrorist organizations. It can also prohibit transactions via communication protocols, smart contracts or software involving cryptos. This could have profound consequences for cryptocurrency users.
Senator Warner's legislative maneuver
On June 5, an X user revealed the senator's apparent strategic insertion of legislative elements Mark Warner. These elements allow the president to have extensive new powers over digital assets.
Warner introduced this legislation in a December 2023 announcement. This allows the Treasury Department to address emerging threats involving digital assets.
The law broadly defines “digital assets,” encompassing any digital representation of value recorded on cryptographically secure distributed ledgers. This includes communications protocols, smart contracts, or other software deployed through the use of a distributed ledger or similar technology. This expansive definition gives the president considerable leeway to intervene on various platforms and technologies.
In addition to blocking transactions, the president can impose strict conditions on foreign financial institutions. It can do this for those who hold accounts in the United States. If these institutions facilitate crypto transactions with entities supporting terrorist organizations, they could be subject to severe sanctions. This measure aims to strengthen the control and surveillance of international financial flows.
Towards a regulated crypto?
Mr. Johnsson's analysis suggests that the law's broad applicability could force users to join KYC-compliant and permissioned blockchain networks. This development could limit users to regulated blockchains. It would thus reduce decentralization and autonomy. However, these elements are at the heart of cryptocurrencies.
Johnsson warns that the move could be seen as an attempt to exert control over cryptos under the guise of fighting terrorism.
The elements added by Warner, borrowed from the Terrorism Financing Prevention Act, reinforce this perception.
The new law could radically transform the use of cryptocurrencies. It would make users more vulnerable to government surveillance and control.
While this measure aims to strengthen national security and fight terrorism, it also raises crucial questions about the freedom and autonomy of users. The future of crypto under this new regulation remains uncertain, and only continued in-depth analysis will fully understand its implications.
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