Jerry Brito, executive director of the nonprofit crypto policy advocacy group Coin Center, suggested that US residents call their elected officials about potential privacy and due process concerns in a new bill proposed by the House leaders.
According to a Twitter thread from Brito on Wednesday, the America COMPETES Act (The Law of the United States COMPITES, in Spanish) recently published by the members of the Chamber contains a provision that, according to him, would be “disastrous” for cryptocurrency users from a privacy and due process point of view. According to the director of the Coin Center, a section of the bill on “prohibitions or conditions on certain transfers of funds” proposed by Representative Jim Himes would give the US Treasury Secretary “uncontrolled and unilateral power to prohibit for exchanges and other financial institutions to transact cryptocurrencies.”
Under the proposed framework, the Secretary of the Treasury could use the Bank Secrecy Act to require certain financial institutions to report information on transactions potentially related to money laundering, as well as prohibit them from serving account holders with such alleged ties to illicit funds. The provision, according to Brito, would essentially bypass existing checks and balances on the Treasury Secretary’s authority in this area.
“First, the law requires the Treasury to engage in public regulation before instituting a ban,” He said Brito. “Second, the secretary can impose a special surveillance measure through a simple order, but its duration is limited to 120 days and must be accompanied by a public regulation. […] While not full due process, these limitations at least alert the public and give it some opportunity to comment on the merit or constitutionality of a special measure.”
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Included in the America COMPETES Act just introduced in the House, and which will very likely pass in some form, is a provision that would be disastrous not just for cryptocurrency but for privacy and due process generally. https://t.co/vLJLnIhQhB pic.twitter.com/1EC0SBaetk
– Jerry Brito (@jerrybrito) January 26, 2022
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Included in the America COMPETES Act that was just introduced in the House, and will most likely pass in some form, is a provision that would be disastrous not only for cryptocurrencies, but also for privacy and due process in general.
The America COMPETES Act cited the use of cryptocurrencies for payments in ransomware attacks against US-based companies. Removing 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:
“[La ley] would give the Secretary of the Treasury unchecked discretion to prohibit financial institutions (including cryptocurrency exchanges) from offering their customers access to cryptocurrency networks. The Secretary cannot use this discretion immediately, but it is not a power the Department should have.”
The balance between regulating cryptocurrencies, providing pseudo-anonymity for users, and innovative technology working in existing financial systems is a delicate one. Brito’s call for supporters to contact their representatives about potential privacy issues may have some merit given current Treasury Secretary Janet Yellen’s take on the space. During her confirmation hearing in January 2021, Yellen said that cryptocurrencies represent a “particular concern” for the US Treasury, as it associates many token projects with “illicit financing” and money laundering..
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