Crypto policy advocacy group warns of ‘disastrous’ provision in new US bill

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Jerry Brito, executive director of the non-profit crypto policy advocacy group Coin Center, suggested that US residents call their elected officials about possible privacy and due process issues in a new bill proposed by lawmakers. House leaders.

According to a Wednesday Twitter thread from Brito, the America COMPETES Act recently released by House members contains a provision that he says would be disastrous for crypto users from a privacy and due process perspective. According to the director of the Coin Center, a section of the bill on prohibitions or conditions of certain transfers of funds proposed by Representative Jim Himes would give the United States Secretary of the Treasury the unchecked and unilateral power to prohibit exchanges and other financial institutions to engage in cryptocurrency. transactions.

Under the proposed framework, the Secretary of the Treasury could use the Bank Secrecy Act to compel certain financial institutions to report information about transactions potentially related to money laundering, as well as prohibit them from serving account holders with such alleged links to illicit funds. The provision, according to Brito, would essentially circumvent existing checks and balances on the authority of Treasury secretaries in this area.

First, the law requires the Treasury to engage in public regulation before instituting a ban, Brito said. Second, the secretary can impose a special surveillance measure by simple order, but its duration is limited to 120 days and must be accompanied by a public order. […] While not due process, these limitations at least alert the public and give them an opportunity to comment on the merits or constitutionality of a special measure.

1/ WARNING

Included in the America COMPETES Act that was just introduced in the House, and which will most likely pass in some form, is a provision that would be disastrous not just for cryptocurrency, but for privacy and due process in general. https://t.co/vLJLnIhQhB pic.twitter.com/1EC0SBaetk

— Jerry Brito (@jerrybrito) January 26, 2022

The America COMPETES Act cited cryptocurrencies used for payments in ransomware attacks against US-based companies. The removal of restrictions from the Treasury Department’s Special Measures Authority could have significant implications for individuals and businesses operating in the crypto space, according to Brito and Coin Center Research Director Peter Van Valkenburgh:

[The law] would give the Secretary of the Treasury unfettered discretion to prohibit financial institutions (including cryptocurrency exchanges) from offering their customers access to cryptocurrency networks. The secretary cannot use this discretionary power immediately, but it is not a power that the department should have.

Related: US Treasury says it needs to modernize and adapt to digital currencies

The balance between regulating crypto, providing pseudo-anonymity to users, and integrating innovative technologies into existing financial systems is a delicate one. Britos’ call for subscribers to contact their representatives about potential privacy concerns may have some merit given Treasury Secretary Janet Yellens’ current views on the space. During his confirmation hearing in January 2021, Yellen said that crypto is of particular concern to the US Treasury, associating many token projects with illicit financing and money laundering.

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