The US is preparing a bill that would allow cryptocurrency exchanges to be banned. How will it affect the coin industry?
The America COMPETES bill of 2022, which was advanced by the House Committee on Science, Space and Technology this week, would fund a range of measures to maintain US economic superiority over China. The case relates to improving medical supply chains, strengthening cybersecurity and advancing scientific research. But there are pitfalls – according to analytics platform Coin Center, the new bill gives the Treasury secretary the power to shut down cryptocurrency exchanges. And that’s a serious threat to the entire digital asset niche. We tell you more about the situation.
What will happen to cryptocurrencies
Coin Center executive director Gerry Brito and head of research Peter Van Valkenburg note that the bill, as it stands, “authorizes the minister to ban any – or even all – cryptocurrency transactions from financial intermediaries without any procedures, rulemaking or limiting the duration of the ban.”
However, the bill does not just apply to crypto. The regulation applies to all regulated financial institutions in the US and is designed to counter international money laundering.
Accordingly, the reason for creating the bill is quite old and well-known. However, it clearly crosses the line in this case, as the ability to block crypto exchanges is unlikely to lead to anything good. And especially when many officials still see digital assets as a negative phenomenon that is supposedly only associated with crooks and criminals.
US Treasury Secretary Janet Yellen
According to Decrypt’s sources, the Treasury Secretary, who is appointed by the president and confirmed by the Senate, already has the power to close any bank account that he or she believes is linked to money laundering. But there is a catch – the freezing of accounts has to be declared publicly and cannot last more than 120 days.
But the proposed legislation removes these requirements and in addition allows the minister to take additional “special measures” to conduct financial monitoring. For example, now the Ministry of Finance can bring almost any “unwanted” transaction under the definition of money laundering. Experts continue.
This bill grants completely unchecked powers to secretly ban or condition any transaction at any national financial institution. This is a dangerously authoritarian approach to tackling money laundering.
Why exactly will the crypto market come under attack? The fact is that money laundering in the US is closely linked to international transactions. Most exchanges are international companies, which means that they interact with a huge number of clients in different countries around the world. Judging by the wording of the bill, their transactions could well be interpreted as “money laundering”, and hence the financial flows of cryptocurrency trading venues could be cut off.
US President Joe Biden
Unfortunately, the problem of money laundering is also relevant to crypto itself. As a reminder, just recently, Chainalysis analysts published a report stating that in 2021, criminals laundered more than $8.6 billion through digital assets, hacking attacks and ransomware. Compared to the previous year 2020, their activity has increased by about 30 per cent.
Nevertheless, the US dollar remains the main tool of criminals in many countries around the world. However, this fact did not stop Treasury Secretary Janet Yellen last year from calling the crypto industry an “area of concern” when it comes to financial transaction security.
We believe that such proposals in the form of bills are too dangerous because they selectively prohibit certain companies from operating in a limited number of areas. Consequently, the climate for the operation of such companies will become less attractive, which may ultimately lead, among other things, to a voluntary withdrawal from such a state. This means that in the end it will lead to a possible slowdown in the crypto sphere, which will surely have a negative impact on the global coin niche as a whole.
What do you think about this? Share your opinion in our Millionaire Crypto Chat. There we will talk about other topics related to the world of blockchain and decentralisation.
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