Sen. Elizabeth Warren, D-Mass, revealed a new bill Thursday aiming to prevent crypto companies from doing business with sanctioned entities.
The Digital Assets Sanctions Compliance Enhancement Act, introduced during a Senate hearing on the role of digital assets in illicit finance, would give President Biden the go-ahead to slap secondary sanctions on those that transact with sanctioned individuals, companies or governments. It would apply to any sanctions imposed by the US — most pressingly, Russian ones.
Related: Crypto Needs Common Sense Financial Regulation – Suggestions for 2022
The proposed legislation, the Digital Asset Sanctions Compliance Enhancement Act, uses such a staggeringly broad definition that more or less anyone involved in creating cryptocurrencies or running a business using one would be covered.
It is also, according to a leading cryptocurrency advocacy group, “unnecessary, overbroad and unconstitutional.”
The legislation would “place sweeping restrictions on persons who build, operate, and use cryptocurrency networks even if they have no knowledge or intent to help evade sanctions,” CoinCenter executive director Jerry Brito and research director Peter Van Valkenburgh said in a statement.
Specifically, the text states that “the term ‘digital asset transaction facilitator’ means — any person, or group of persons, that significantly and materially facilitates the purchase, sale, lending, borrowing, exchange, custody, holding, validation, or creation of digital assets on the account of others, including any communication protocol, decentralized finance technology, smart contract, or other software, including open-source computer code.”
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