US House Provision On Blocking Crypto Transactions Pulled

There’s been an agreement to cut out a provision in a U.S. House bill which would’ve given the Treasury Secretary the ability to block international crypto transactions, a report says.

The contested part of the bill came out of the America COMPETES Act, which was introduced in the House last week and would spur economic competition with China.

The provision had seen opposition from Coin Center, an industry think tank. It was originally introduced by Rep. Jim Himes of Connecticut. Hines confirmed the agreement to remove the provision on Twitter, saying it had been a “good outcome.”

According to the report, Coin Center’s issue with the provision was that it would’ve let the Treasury Secretary block every institution from interacting with a crypto exchange. The jurisdiction is in charge of validating crypto exchanges and transactions.

The current law says the Treasury Secretary can consult with the Federal Reserve chairman, secretary of state, federal regulators and other agencies on imposing those restrictions, though a public rulemaking notice has to be issued alongside it.

The restriction would expire after 120 days, and there’s a comment period. Both of those rules would be cut under the provision. Coin Center said the provision would add digital assets to the types of financial transactions that could be restricted, too.

PYMNTS also recently wrote about a proposed rule that could enforce know-your-customer rules on crypto wallets. That would make it so the exchanges have to collect names, addresses and other details from anyone looking to transfer cryptocurrency to private wallets.

See also: A Rule to Require Crypto Exchanges to Collect Customer Data Under Consideration Again

That was initially proposed by former Treasury Secretary Steven Mnuchin in 2020.

Industry leaders were against it because of the difficulty for some wallets to implement. Others said it could become difficult for individuals.

Now it has been proposed again as of Jan. 31, with the post on the Federal Register saying FinCEN is “proposing to amend the regulations implementing the Bank Secrecy Act to require banks and money service businesses to submit reports, keep records, and verify the identity of customers in relation to transactions involving convertible virtual currency (CVC) or digital assets with legal tender status held in unhosted wallets, or held in wallets hosted in a jurisdiction identified by FinCEN.”