New Proposed Legislation Allows US President to Restrict Digital Assets

A new law proposed by the U.S. Congress that gives the president broad powers to block access to digital assets including cryptocurrency and NFTs. The legislation, called the Intelligence Authorization Act for Fiscal Year 2025, has been updated with elements from the Terrorist Financing Prevention Act of December 2023. The bill has been bringing in criticism from crypto proponents and financial experts due to the sweeping scope of powers being granted.

Both bills were introduced by Senator Mark Warner (D) of Virginia. The elements that enable the empowerment to restrict digital assets were taken from this original bill, and recently added, by Warner, to the new bill. Reasons given for the added elements point to the U.S Treasury Department and for purposes related to their need to combat emerging threats involving digital assets, such as for counter-terrorism efforts.

Reported by Cointribune, crypto influencer Scott johnsson emphasized concerns that the law could restrict the freedom to use cryptocurrencies. The law broadly defines digital assets as any digital representation of value recorded on cryptographically secured distributed ledgers. This includes communication protocols, smart contracts, or other software deployed using distributed ledger technology or similar. This broad definition gives the president considerable leeway to intervene in various platforms and technologies.

The law’s broad applicability could force people to use only regulated blockchain networks that are compliant with Know Your Customer (KYC) norms being popularized within the financial industry. In turn this would likely reduce the core characteristics, such as decentralization and autonomy, of cryptocurrency and blockchain technologies. Johnsson also implied that the measure could be an attempt to control cryptocurrency under the guise of fighting terrorism.

Along with blocking transactions, the president can also impose strict conditions and punishments on foreign financial institutions holding accounts in the United States. If these institutions facilitate crypto transactions with entities supporting terrorist organizations, they could face severe sanctions. This measure aims to strengthen the control and surveillance of international financial flows for purposes of national economic security.

Senator Warner is the chairman of the Senate Select Committee on Intelligence. You can read his press release about the original bill called the Terrorist Financing Prevention Act bill here. The following is an excerpt from the press release.

“The Terrorism Financing Prevention Act will make sure that the Treasury Department has the tools necessary to enforce our sanctions against Hamas and other terror groups,” said Sen. Warner. “I’m pleased to join Senators Rounds, Reed, and Romney in introducing this bipartisan legislation to improve our national security.”

You can read Warner’s press release about the new bill called the Intelligence Authorization Act for Fiscal Year 2025 here. The following is an excerpt from the press release.

“This year’s bill enhances the IC’s ability to identify and counter emerging technological threats posed by adversarial nations, including foreign adversaries’ efforts to use and dominate areas like artificial intelligence, biotechnologies, and next-generation energy. The IAA also designates foreign ransomware organizations as hostile cyber actors and ensures the IC has the tools it needs to counter economic coercion and illicit technology transfer, in particular by the People’s Republic of China. It also reforms the nation’s security classification system, strengthens the security of our election systems, and furthers the Committee’s efforts to ensure the IC can attract and expeditiously on-board a talented, diverse, and trusted workforce to meet the emerging challenges we face.”