The United States government has taken a historic move in its fight against the illegal use of cryptocurrencies. The recently introduced bipartisan bill dubbed, the RESTRICT Act, seeks to reinforce the US government’s power in preventing foreign threats, such as those posed by cryptocurrencies, by requiring the Secretary of Commerce to take specific actions aimed at reducing such threats.
The RESTRICT Act, also known as the “Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act,” is conceptually similar to the International Emergency Economic Powers Act (IEEPA) that authorizes the Treasury’s Office of Foreign Assets Control (OFAC) to block Americans from transacting with certain persons. The new bill, however, does not contain the same protections when it comes to protected speech activities and does not necessitate the president’s involvement before preventing transactions.
Coin Center, a crypto advocacy group, has expressed worry of the Act affecting the cryptocurrency space, potentially putting users of cryptocurrency services, such as Bitcoin, at risk of being blocked from access. The group also posted on twitter that the bill “will change the internet as the US currently knows it.”
Lead author of the bill, Senator Mark Warner, said the bill was designed to give the Commerce Department new powers to “review, prevent, and mitigate information communications and technology transactions that pose undue risk to our national security,” penalizing those who violate the Act with fines of up to $250,000 and up to twenty years imprisonment.
This bill is the latest in a series of moves by the US Government to create more oversight on the use of cryptocurrencies. Others include the Securities and Exchange Commission’s million fine to cryptocurrency exchange Kraken for failing to register its staking services as a security, and the forced closure of Signature Bank, one of the US’ most crypto-friendly banks. (https://ctlsites.uga.edu) This move led former board member, Congressman Barney Frank, to conclude that the closure was a message against the use of cryptocurrencies.
The US Government has long been able to regulate and supervise the activities of banks, but it has largely been unable to regulate cryptocurrencies and the companies that use them. With the introduction of the RESTRICT Act, the government will finally have the legal footing to regulate cryptocurrency related activities and hopefully bring down the rampant use of cryptocurrencies for crime. This could go a long way in protecting the environment for the legitimate use of cryptocurrencies for consumer and business purposes.
