New Law Grants US President Power to Block Access to Digital Assets

A new law proposed by United States Senator Mark Warren has sparked significant concern within the crypto community. Aimed at combating terrorism and illicit activities, the legislation grants the President authority to block access to digital assets.

Legal Expert Raises Concerns Over Crypto Law's Potential Impact on Decentralized Finance

Finance lawyer Scott Johnsson, a vocal supporter of the emerging crypto economy, expressed apprehension about the law's potential impact. He warned that it could enable the President to impose user-level bans on decentralized finance (DeFi) protocols flagged by the US Department of Treasury.

Johnsson's concerns stemmed from clauses borrowed from the Terrorist Financing Prevention Act [S.3441], which allows the Treasury to block transactions to sanctioned foreign digital asset transaction facilitators.

Johnsson fears that the law's broad applicability could compel users to shift to Know Your Customer (KYC)-compliant and permissioned blockchain networks, limiting them to regulated blockchains. He suggested it might be part of a broader strategy to control the crypto economy under the guise of anti-terrorism measures.

Proposed Crypto Law: Empowering the President Amidst Political Discord

The proposed law defines crypto assets broadly, encompassing communication protocols, smart contracts, and software deployed through distributed ledger technology. It empowers the President to restrict transactions between US residents and foreign entities linked to terrorism.

The proposed law emerges amid political discord in the US. While some legislative actions have favored cryptocurrencies, such as the Financial Innovation and Technology for the 21st Century Act, others have faced opposition.

A recent bill aimed at SEC regulations on digital assets was vetoed by President Joe Biden, citing concerns about consumer and investor well-being.

The proposed law represents a significant development in US crypto regulation, raising concerns about potential restrictions on digital asset access. As the legislative process unfolds, stakeholders in the crypto community closely monitor its implications for the industry's future.