One of the most draconian pieces of crypto legislation thus far has just passed the House of Representatives. HR 5306 is an amended version of a bill put forward last January. The purpose of the bill is to establish an ‘Independent Financial Technology Task Force’ in a bid to combat crimes involving cryptocurrency. The act is titled the ‘Financial Technology Protection Act.’
The US to combat widespread sanctions avoidance
The ambit of the legislation is very wide. One section is titled ‘Preventing Rogue And Foreign Actors From Evading Sanctions.’ Countries who evade sanctions are being demonized by US politicians and Washington strategists. However these countries generally have the support of much of the globe, and even Europe is now aligning itself with other countries due to a harsh US foreign policy.
Iran, North Korea, Venezeula, Turkey, and many other countries are making wide and open use of cryptocurrencies in a bid to avoid US sanctions, and there is little that the US can do to prevent this from happening. This is being done on a government level where cryptocurrencies are being developed mainly to avoid sanctions and on an individual level where people are purchasing increasing amounts of decentralized currencies. Turkey is one of the strongest examples, with an incredible 18% of the Turkish population owning or trading cryptocurrency.
Financial technology protection, terrorism, and money laundering
Sanctions aside, the bill contains terrifying provisions on an individual basis. A reward not exceeding USD 450,000 can be granted to those who release information “leading to convictions related to terrorist use of digital currencies.” The word terrorism is very much open to interpretation – from the perspective of Washington, using cryptos to avoid sanctions is a form of terrorist activity. For the rest of the globe, it is perfectly legitimate, especially when sanctions contribute to hyperinflation and starvation.
It is established that criminals prefer cash to cryptocurrency, by a wide margin. Earlier this month, the Foundation for Defense of Democracies Center on Sanctions and Illicit Finance (FDD CSIF) testified before Congress that cryptocurrency is a poor form of money for terrorists.
With regard to money laundering, Danske Bank has recently admitted to AML errors amounting to EUR 200 Billion over an eight-year period, the biggest scandal in European banking history. At the time of this writing, this is more than the total market cap of the entire cryptocurrency industry, which is around EUR 192 Billion.
It is important to note that while the Financial Technology Protection Act will increase the power that US authorities have to incarcerate individuals for cryptocurrency adoption, there are a number of pro-crypto bills being introduced which are attempting to legitimize its use and work with the new form of financial technology, instead of against it.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.