The Anti-TikTok RESTRICT Act can be turned against crypto and much else, warns the think tank

The RESTRICT Act, a bipartisan bill introduced earlier this month in the US Senate, could be used in broad and unexpected ways, including to threaten crypto, if it were to become law, the Coin Center think tank warned in its blog.

The bill, known formally as the “Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act,” and informally as the TikTok ban, has been introduced amid suspicions that the Chinese-owned TikTok app is collecting user data on behalf of the Chinese government.

The act gives the Commerce Department new powers that would “comprehensively address the ongoing threat posed by technology from foreign adversaries” by allowing it to “review, prevent, and reduce information communications and technology transactions that pose undue risk to our national security.”

Under Title 15 of the Code of Federal Regulations, the United States’ foreign adversaries are China (including Hong Kong), Cuba, Iran, North Korea, Russia, and the Maduro regime in Venezuela.

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According to Coin Center, the bill is conceptually similar to the International Emergency Economic Powers Act which authorizes the Treasury’s Office of Foreign Assets Control (OFAC) to block Americans from trading with sanctioned parties. Coin Center pointed to OFAC’s sanctioning of Tornado Cash immutable smart contracts as an abuse of that law to ban a class of technology and expressed its concern that:

“The RESTRICT Act creates blanket authority, with few checks, to ban just about anything related to a ‘foreign adversary’.”

Not only that, the RESTRICT Act would be easier to apply and harder to challenge. “Its potential implications for the cryptocurrency space cannot be ignored,” Coin Center said.

The bill carries penalties of up to 20 years in prison and $250,000 in fines. Legal experts say the law is vaguely worded and could be used to restrict a range of technologies, such as virtual private networks, or VPNs. Lead author of the bill, Democrat Mark Warner, said:

“We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America.”

Kirsten Gillibrand, co-author with Cynthia Lummis of the Responsible Financial Innovation Act, is among the sponsors of the bill.

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