Coin Center worries that the RESTRICT Act could be used to ban crypto.
Coin Center, a non-profit crypto think tank, has warned that the recently introduced RESTRICT Act could be used to disrupt crypto activities if it is passed into law.
The RESTRICT Act, which stands for Restricting the Emergency of Security Threats that Risk Information and Communications Technology Act, was introduced in the US Senate by a bipartisan group of Senators led by Mr. Warner and Mr. Thune on March 7th.
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The bill seeks to give the federal government new powers to fight perceived threats due to foreign technologies. This legislation, informally known as the TikTok ban, primarily targets companies such as TikTok that are suspected of illegally collecting users’ personal information.
However, Coin Center stated that the language of the bill is vague, and it could cause a disaster for digital currencies.
Although the primary targets of this legislation are companies like Tik-Tok, the language of the bill could potentially be used to block or disrupt cryptocurrency transactions and, in extreme cases, block Americans’ access to open source tools or protocols like Bitcoin.
Coin Center compared the bill to the International Emergency Economic Power Act (IEEPA), which enables the Office of Foreign Asset Control (OFAC) to prevent transactions between US citizens and sanctioned foreign parties. The crypto advocacy group claimed that the RESTRICT Act would create a similar “sanction regime” to that of the OFAC.
The company highlighted that these two acts create “blanket authority,” allowing regulators to sanction anything associated with “foreign adversaries.” Coin Center underlined the OFAC’s sanctioning of Tornado Cash in August 2022 as an example of the abuse of power granted under the IEEPA.
The US identifies China, Russia, North Korea, Iran, and Venezuela (the Maduro regime) as its “foreign adversaries.”
Coin Center also claimed that the RESTRICT Act creates a redundant regime that would limit the ability of the affected parties to challenge arising legal actions due to “process concerns.”
Many Twitter users agree with Coin Center’s claims, noting that RESTRICT Act “is about technology.”
Some legal experts have also weighed in on the bill, claiming the RESTRICT Act uses a broad language and could be applicable to a wide range of technologies, including VPNs.
After the collapse of FTX and the downfall of major crypto-related banks, US authorities are tightening their grip on the crypto industry. Most recently, US SEC issued a Wells Notice to crypto exchange Coinbase over alleged security law violations.