A recent law has been passed that gives the President of the United States extensive authority to restrict access to digital assets, causing alarm among commentators in the world of digital assets. Scott Johnsson, a well-known figure in this field, criticized the law for its wide-reaching implications on June 6th.
A user on X brought attention to Senator Mark Warner’s strategic addition of legislative components on June 5th, which paved the way for the controversial new powers granted to the U.S. president over digital assets.
The law defines “digital assets” in a broad sense, covering any digital representation of value stored on securely encrypted distributed ledgers.
According to the new law, the president has the ability to halt transactions between U.S. individuals and foreign entities that are linked to supporting terrorist groups. This also includes imposing strict regulations on foreign financial institutions that have accounts in the U.S. and are involved in such transactions.
Johnsson’s analysis indicates that the law’s wide-ranging impact may force users to only engage with Know Your Customer (KYC)-compliant and permissioned blockchain networks, restricting them to regulated blockchains. He cautions that this move could be interpreted as an attempt to control digital assets under the pretext of combating terrorism.
The legislative components introduced by Warner that enable this presidential authority are taken from the Terrorism Financing Prevention Act, which was announced in December 2023, allowing the U.S. Treasury Department to address “emerging threats involving digital assets.”
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