New law gives US president broad powers to block access to assets

A new law gives the President of the United States broad powers to block access to digital assets, sparking serious concerns among X commentators.

Scott Johnson, a prominent voice in the digital assets space, criticized the law for its broad scope on June 6, saying:

“It is difficult to see how this is not intended to serve as user-level blocking authority by the President on any protocol/smart contract that the Secretary of the Treasury considers to be ‘controlled, exploited or (impaired) disposition)” by strangers. punishments. The offender. Incredible scale and impacts on users of KYC/authorized channels.

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Senator Warner’s legislative maneuver

On June 5, a One

Source: Blockchain Tip Sheet

The new law broadly defines “digital assets,” including any digital representation of value recorded on cryptographically secure distributed ledgers.

“(…) any communications protocol, smart contract or other software (…) deployed through the use of a distributed ledger or similar technology; “And (…) provides a mechanism for users to interact and agree to the terms of trading digital assets.”

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Just Biden time.

Under the new law, the president can block transactions between U.S. persons and foreign entities identified as supporting terrorist organizations.

This includes imposing strict requirements on foreign financial institutions that hold accounts in the United States if they are found to be facilitating such transactions.

“(…) prohibit any transaction between any person subject to the jurisdiction of the United States and a foreign facilitator of digital asset transactions designated under paragraph (1).”

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Implications for Digital Asset Users

Johnson’s analysis suggests that the law’s broad applicability could force users to join permissioned, KYC-compliant blockchain networks, ultimately limiting them to regulated blockchains.

He warns that the move could be seen as an attempt to exert control over digital assets under the guise of fighting terrorism.

The elements that Warner would have added to allow this presidential authorization are borrowed from the Terrorism Financing Prevention Act.

The law was introduced in a December 2023 announcement, allowing the U.S. Treasury to address “emerging threats involving digital assets.”

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