Regulation
New US cryptocurrency regulations empower president to block access to cryptocurrencies
A groundbreaking law recently granted the US president broad powers to regulate the use of cryptocurrencies, sparking concerns among various observers. This new legislation allows the president to intervene in transactions between US citizens and foreign entities linked to terrorist organizations.
Crackdown on cryptocurrencies
The law requires the Secretary of the Treasury to identify and report any foreign banks or cryptocurrency transaction facilitators that knowingly engage in significant transactions with terrorist groups. This identification process must be completed within 60 days of the law coming into force and repeated periodically.
Once identified, the president gains the power to ban or impose strict conditions on these foreign banks opening or maintaining accounts in the United States. Additionally, the president can block any transactions involving American entities with foreign facilitators of digital asset transactions.
However, there are fears in some quarters that this may be an attempt to assert control over cryptocurrency under the guise of counter-terrorism efforts.
Executive authority in play
Under sections 203 and 205 of the International Emergency Economic Powers Act (IEEPA), the President may enforce these measures, including imposing sanctions on individuals or entities found to be in violation, as outlined in section 206 of the IEEPA.
Transparency and controls
The law also establishes procedures for judicial review of classified information. If findings or sanctions are based on confidential information, the Secretary of the Treasury may present this information to the court ex parte and in camera, allowing the judge to review it privately without public disclosure.
Balancing national interests and intelligence
There are provisions for waiving sanctions if deemed to be in the U.S. national interest. The Secretary of the Treasury must inform Congress of these waivers, accompanied by a statement explaining the reasons. There is also an exception for intelligence activities, ensuring that these measures do not impede authorized intelligence operations.
Is it time to welcome stricter regulations?!
Additionally, the bill amends section 5318A of title 31, United States Code, to introduce new prohibitions or conditions on specific transfers of funds. If the Secretary of the Treasury determines that certain jurisdictions, institutions, or transactions pose a significant risk of money laundering, he or she is authorized to impose conditions on transfers of funds involving such entities.
These amendments authorize the Secretary, in conjunction with other appropriate officials, to take action against domestic financial institutions or agencies involved in these “high-risk transactions.”