An agreement to remove a provision in a U.S. House of Representatives bill giving the Treasury secretary the ability to block international crypto transactions has been reached, according to Jerry Brito, the executive director of Coin Center, an industry think tank that lobbied against the provision.
I’m happy to report @jahimes has listened to our voices and looks like the notice and comment protections in the COMPETES Act related to special measures will be retained! This is in a “manager’s amendment” that will be considered later this week. pic.twitter.com/6mAtLD0tF9
— Jerry Brito (@jerrybrito) January 31, 2022
A provision in the America COMPETES Act, a bill introduced in the U.S. House of Representatives last week, would have allowed the Treasury secretary to block or “impose conditions” on transactions, should the official find that the transaction or the accounts involved are engaged in money laundering. The overall bill is aimed at spurring economic competitiveness with China.
Coin Center warned in a blog post, however, that the bill could therefore allow the Treasury secretary to block all U.S. financial institutions from interacting with a crypto exchange, a jurisdiction that has crypto exchanges and crypto transactions validated by a non-U.S. miner or non-custodial wallets.
Under existing law, the Treasury secretary, in consultation with the Federal Reserve chairman, secretary of state, federal regulators and other agencies, has the power to impose such restrictions on transactions. However, a public rulemaking notice must be issued with the restriction, and the restriction lifts after 120 days unless the Treasury Department implements a rule continuing the block after the comment period.
The proposed provision would have removed the comment period and 120-day expiration, according to Coin Center, in addition to explicitly adding digital assets to the types of financial transactions that the Treasury secretary could restrict.