Regulation
New law allows US president to block crypto transactions
A new law granted the US president extensive power to block access to cryptocurrencies, sparking concern among observers. This development allows the president to block transactions between American persons and foreign entities linked to terrorist organizations.
THE law requires the Secretary of the Treasury to identify and report any foreign bank or crypto transaction facilitator knowingly engaging in mass transactions with terrorist organizations. This identification must be made within 60 days of the enactment of the law and periodically thereafter.
Once identified, the President must prohibit or impose strict conditions on the opening or maintenance of accounts by these foreign banks in the United States. For foreign facilitators of digital asset transactions, the president can ban any transactions between them and Americans. Some community members believe this is an attempt to control crypto under the guise of fighting terrorism.
Under sections 203 and 205 of the International Emergency Economic Powers Act (IEEPA), the President may implement these measures. This power includes imposing sanctions on those who violate the regulations, similar to those described in Section 206 of the IEEPA.
The law also provides for procedures for judicial review of classified information. Suppose a finding or sanction is based on classified information. In this case, the Treasury Secretary can submit this information to the court ex parte and in camera, meaning the judge can review it in private without being publicly disclosed.
There are provisions for waiving sanctions if it is found to be in the national interest of the United States. The Secretary of the Treasury must notify Congress of these waivers and state the reasons. There is also an exception for intelligence activities, ensuring that these measures do not interfere with authorized intelligence operations.
Additionally, the Act amends section 5318A of title 31, United States Code, to add new prohibitions or conditions on certain transmissions of funds. If the Secretary of the Treasury believes that certain jurisdictions, institutions, or transactions pose a significant money laundering problem, he or she may impose conditions on fund transfers involving those entities.
The amendments allow the Secretary, in consultation with other key officials, to take action against domestic financial institutions or agencies involved in these “high-risk transactions.”