Legal policy experts at Coin Center have warned that a controversial proposed law to ban the popular social media app TikTok could also be used to clamp down on crypto. The non-profit organization, which is focused on crypto, claims that the bill’s language could be interpreted too broadly and could prevent Americans from accessing “entire classes of technologies,” including Bitcoin. The Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act, introduced by the Department of Commerce, would give the department broad authority to regulate tech products produced in countries with adversarial relations to the United States. Critics claim that the crypto industry has come under increased regulatory pressure recently, with lawsuits and legislation that could push the sector overseas.
A Silent Attack On Crypto?
The proposed RESTRICT Act would require the Department of Commerce to investigate and prevent uses of technology which involve adversarial interests, and which pose a national security risk to the US. However, Coin Center has warned that the bill’s language could be overly broad and could prevent Americans from accessing “entire classes of technologies,” including Bitcoin, 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.
Coin Center has also likened the legislation to the currency Office of Foreign Asset Control regime, which can block Americans from transacting with sanctioned foreign powers. However, the RESTRICT Act does not contain the same carve-out for free speech activities or require the President to declare a national emergency before preventing transactions, as the Emergency Economic Powers Act does. As a result, Coin Center has called for greater oversight and review of the use of the legislation.
Regulatory Pressure on Crypto
In recent weeks, the crypto sector has come under increased pressure from regulators. Last month, the SEC fined Kraken $30m for failing to register its staking services as a security. Last week, the SEC issued a Wells Notice to Coinbase related to a similar product. Meanwhile, regulators, including the Treasury Department, forced Signature Bank, one of the US’s most crypto-supportive banks, to close. The bank’s board member, Barney Frank, claimed that the move was intended to send an “anti-crypto message.”