Some may remember when the “Special Measures to Fight Modern Threats Act” was excluded from the National Defense Authorization Act and then later excluded from the COMPETES Act. It seems that the bill is back once again after Representative Jim Himes (D‑CT) reintroduced it last week.

Originally, the bill was designed to remove a number of public notice requirements and expand the Treasury’s enforcement abilities under the Bank Secrecy Act (BSA) in order to, “[streamline] the process by which special measures may be introduced and [modernize] the authorities granted to the Financial Crimes Enforcement Network (FinCEN).”

The new version of the bill, however, no longer contains the language that would have released the Treasury from having to notify the public of its actions. It also no longer contains the language that would have removed the time limits on the enforcement actions themselves. So it’s no longer a case of the Treasury receiving unchecked power, but the bill does still seek to expand the Treasury’s powers through the section titled, “Prohibitions or Conditions on Certain Transmittals of Funds.”

As I explained in January, this section would make it possible for the Treasury to prohibit transactions involving anyone outside the United States. For instance, one likely scenario is that the Treasury would use this authority to prohibit U.S. banks from being involved with cryptocurrency transactions validated by miners located outside of the United States. For a technology built on being decentralized and borderless, this section could end up being a major setback. When this language appeared in the COMPETES Act, Jerry Brito and Peter Van Valkenburgh wrote,

[A]ll cryptocurrencies are inherently global in scope and therefore any cryptocurrency transaction could credibly be related to a foreign jurisdiction (the block that it appears in may be mined anywhere in the world, copies of the transaction messages are broadcast all over the world, etc.). In short, the language facially empowers the Secretary to prohibit any (or indeed all) cryptocurrency transactions at financial intermediaries…

It is disappointing to see such a broad expansion of the Treasury’s authority––especially considering it was only a few months ago that the Canadian government used its own set of special authorities to freeze bank accounts and prohibit transactions. Those types of restrictions and violations of basic financial freedoms should not be a part of America’s future. Rep. Himes’ bill would take U.S. law in the wrong direction. It’s time to leave this bill in the past.