Restrict Act’s Broad Impact on CryptocurrenciesThe proposed Restrict Act, introduced by Senators Mark Warner and John Thune, aims to prevent or disrupt financial holdings and transactions with foreign enemies that pose a threat to the United States security. However, the bill’s language has raised concerns among cryptocurrency experts and advocates.
Think tank Coin Center released a press statement expressing concerns that if the Restrict Act passes, it could be used broadly and unanticipatedly, potentially affecting cryptocurrencies. The act seeks to give the Commerce Department the authority to examine and prevent information communication and technology transactions that pose an unreasonable risk to national security.
Possible Abuses of the Restrict Act
Experts are theorizing on the possible abuses of the Restrict Act and the potential dangers it poses to cherished technologies such as cryptocurrencies. While the primary targets of the bill are companies like TikTok, its language has the potential to be used to prevent or disrupt crypto transactions, denying Americans access to protocols such as bitcoin in extreme situations.
Foreign Enemies Listed in Title 15 of the Code of Federal Regulations
Title 15 of the Code of Federal Regulations lists the foreign enemies of the United States, including China, Cuba, Hong Kong, North Korea, Iran, Russia, and the Maduro regime in Venezuela. The act potentially gives the Treasury’s Office of Foreign Assets Control (OFAC) the power to prevent Americans from doing business with sanctioned parties.
Concerns About Sanctioning of Tornado Cash’s Immutable Smart Contracts
Coin Center is particularly concerned about the sanctioning of Tornado Cash’s immutable smart contracts by OFAC, which exemplifies how the law has been abused to outlaw a particular technological class. The think tank warns that the Restrict Act’s broad language could have unintended consequences and negatively impact the development and growth of the cryptocurrency industry.
While the primary aim of the Restrict Act is to address the persistent threat of foreign technology, its broad language and potential for abuse have raised concerns among cryptocurrency experts and advocates. The bill’s impact on cryptocurrencies remains to be seen, but it is clear that further discussions and considerations are necessary to balance national security concerns with the innovation and development of emerging technologies.