An executive order signed by President Barack Obama has enabled US authorities to become the first to confiscate cryptocurrency holdings without warning.
The document, ‘Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities,’ which surfaced Wednesday, states that the measures are needed to counteract “an unusual and extraordinary threat to the national security” posed by “cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States.”
While the impetus for the order’s hasty enactment is not elaborated upon, it is in the interests of “national security” that authorities in the US are now seemingly able to immediately seize and hold an individual’s cryptocurrency wealth without giving prior notice.
The declaration by Obama states:
“I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to section 1 of this order.”
The document contains few details as to how such confiscation procedures would be implemented. Indeed, the circumstances which would require authorities to enact the powers delineated in the order are themselves left vague, Obama declaring only that “the making of donations of the type of articles specified in section... of this order would seriously impair my ability to deal with the national emergency declared in this order.”
Speaking to Cointelegraph about the ramifications of the new powers, SuperNET developer James Lee suggested that the move means the US government has overtaken other major jurisdictions with more draconian state policies relating to cryptocurrency.
“Now the USSA can simply confiscate all crypto without any need for time consuming paperwork. This I believe puts USSA in the lead (by a big margin) over China and Russia as far as dictatorial level usurpation of financial rights,” he said.
The extent to which the order could affect individual wallet holders in future naturally remains unclear. Community commentators however have raised concerns about operators such as Coinbase, which requires users’ personal details such as credit history during its verification process.
Speaking to Cointelegraph in January, CEO Brian Armstrong explained that Coinbase’s verification processes “in many cases rely on third parties for verification” and that “some of these third parties include credit history checks.”
While the ultimate effect of this latest directive cannot be assessed from the vagueness of the language it contains, it could well leave consumers nervous about the legitimacy with which they use and send Bitcoin to certain addresses, or within certain spheres.
In a satirical yet defiant retaliation, Reddit user u/KayRice posted transaction details of a donation to Edward Snowden following publication of the order.
[Editor's note: The article was marked as an opinion piece since cryptocurrencies weren't specifically mentioned in the Executive Order.]
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