America COMPETES Act passes House without 'disastrous' provision on crypto

A piece of legislation aimed at addressing supply chain issues to keep the U.S. economy and businesses competitive has passed the House of Representatives — without a provision many in the crypto space had criticized for giving the Treasury Secretary authority to shut down exchanges.

In a 222-210 vote on Friday, the House of Representatives passed the America COMPETES Act mostly along party lines. The provision originally proposed by Connecticut Representative Jim Himes would seemingly have allowed the Treasury Secretary to have fewer limits on surveilling financial institutions with suspected transactions connected to money laundering and not open the matter to include public feedback. However, lawmakers modified the wording earlier this week to safeguard restrictions currently under by the Bank Secrecy Act.

I'm happy to report @jahimes has listened to our voices and looks like the notice and comment protections in the COMPETES Act related to special measures will be retained! This is in a "manager's amendment" that will be considered later this week. pic.twitter.com/6mAtLD0tF9— Jerry Brito (@jerrybrito) January 31, 2022

Prior to Himes essentially reversing part of his provision, non-profit crypto policy advocate group Coin Center criticized the legislation for potentially giving the Treasury Secretary “unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.” North Carolina Representative Ted Budd also proposed modifying the provision, calling it a “massive mistake”:

A new provision in the COMPETES Act would allow the Treasury Department to unilaterally prohibit certain financial transactions *without* public input.

I've submitted an amendment to fix this massive mistake. #crypto #blockchain https://t.co/S8Gi0AIz4l— Congressman Ted Budd (@RepTedBudd) January 27, 2022

“The Treasury Department should not have unilateral authority to make sweeping economic decisions without providing full due process of rulemaking,” said Budd in a Jan. 27 statement. “This draconian provision would not help America compete with China, it would employ China’s heavy-handed playbook to snuff out financial innovation in our own country.”

Related: White House reportedly preparing executive order on crypto

The bill will likely move to the Senate next, where it may be subject to different amendments from other U.S. lawmakers. If both chambers approve an identical bill, President Joe Biden will be able to sign it into law.