The RESTRICT Act, a bipartisan bill introduced earlier this month in the US Senate, could be widely and unexpectedly applied, including to threaten cryptocurrencies, if it becomes law, the think tank Coin has warned. Center, on his blog.
The bill, formally known as ”Restricting the Emergency of Security Threats that Risk Information and Communications Technology Act”, and informally as the TikTok ban, it has been introduced amid suspicions that the Chinese-owned app TikTok collects user data on behalf of the Chinese government.
The law gives the Department of Commerce new powers to “comprehensively address the ongoing threat posed by technology from foreign adversaries,” allowing it to “review, prevent, and mitigate information communications and technological transactions that pose an undue risk to our national security.”
According to Title 15 of the Code of Federal Regulations, America’s foreign adversaries are China (including Hong Kong), Cuba, Iran, North Korea, Russia, and the Maduro regime in Venezuela.
According to Coin Center, the bill is conceptually similar to the International Emergency Economic Powers Act which authorizes Treasury’s Office of Foreign Assets Control (OFAC) to block Americans from transacting with sanctioned parties. Coin Center pointed to OFAC’s sanction of Tornado Cash’s immutable smart contracts as a misuse of that law to ban a class of technology and raised concerns that:
“The RESTRICT Act creates a blanket authority, with few checks, to prohibit almost anything tied to a ‘foreign adversary.'”
Not only that, the RESTRICT Act would be easier to apply and harder to challenge. “Its potential implications for the cryptocurrency space cannot be ignored,” Coin Center said.
If you think the TikTok ban isn’t important, you’ve been missing the big picture – the Restrict Act (Bill S.686) will change the internet at the US currently knows it. It’s not just about TikTok – pic.twitter.com/hBjEHB0tRr
—Freckles (@FrecklesNFrce) March 27, 2023
The bill provides for prison sentences of 20 years and fines of USD 250,000. Legal experts say the law is vaguely worded and could be used to restrict a number of technologies, such as virtual private networks, or VPNs. The lead author of the bill, Democrat Mark Warner, stated:
“We need a comprehensive, risk-based approach that proactively addresses sources of potentially dangerous technology before they gain a foothold in the United States.”
Kirsten Gillibrand, co-author with Cynthia Lummis of the Responsible Financial Innovation Act, is among the sponsors of the bill.
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