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A controversial bill to ban the popular social media app TikTok could potentially be used to clamp down on crypto, say legal policy experts at Coin Center.
The crypto-focused non-profit claimed that, in extreme cases, the legislation could be used to “block Americans’ access to open source tools or protocols like Bitcoin.”
A Silent Attack On Crypto?
The Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act (aka RESTRICT Act), introduced on March 7th, would give the Department of Commerce broad authority to regulate tech products produced in countries with adversarial relations to the United States.
Specifically, the department would be required to investigate and prevent uses of such technology which involve adversarial interests, and which pose a national security risk to the United States. According to Coin Centre, the bill’s language could be open to an overly broad interpretation that prevents Americans from accessing “entire classes of technologies,” whether or not foreign adversaries have an interest in the technology.
“We would object to an overbroad interpretation of “interest” wherein the Secretary attempted to argue that the entire class of all Bitcoin transactions, for example, is a class of transactions in which U.S. foreign adversaries have an interest,” read Coin Centre’s statement.
The non-profit likened the new legislation to the currency Office of Foreign Asset Control (OFAC) regime, which allows it to block Americans from transacting with sanctioned foreign powers. OFAC came under scrutiny last August when it added Tornado Cash’s immutable smart contracts to its list of sanctioned entities, which Coin Centre argued could be a violation of the First Amendment.
However, unlike OFAC’s powers granted under the Emergency Economic Powers Act (IEEPA), the RESTRICT Act doesn’t contain a carve-out for protected speech activities, nor does it require the President to declare a national emergency before preventing transactions.
“A broad and discretionary power to ban and disrupt all manner of information technologies should not be wielded without appropriate oversight and opportunity for review,” wrote Coin Centre.
Regulatory Pressure on Crypto
The crypto industry has been targeted with all manners of lawsuits and legislation this month that critics argue could push the emergent sector overseas.
The Securities and Exchange Commission (SEC) slapped crypto exchange Kraken with a $30 million fine last month for failing to register is staking services as a security. Last week, the agency targeted Coinbase with a Wells Notice for providing a similar product.
Regulators including the Treasury Department also forced Signature Bank to close earlier this month – one of the United States’ most crypto-supportive banks. A former congressman and board member for the bank, Barney Frank, claimed the regulators did this deliberately to send an “anti-crypto message.”