The US Attempts to Halt Iranian Cryptocurrency with New Legislation

The diplomatic relations between the U.S. and Iran continue to worsen after president Trump pulled out of the “Iran Nuclear Deal” earlier this year. The fallout is now reaching the crypto world as the U.S. is set to put in place more laws and regulations to prohibit any crypto activity originated from Iran.

Rep. Mike Gallagher has introduced the “Blocking Iran Illicit Finance Act”. This bill will attempt to prevent Iran from advancing in its efforts to create its own cryptocurrency. Cryptocurrencies have the inherent ability to bypass any restrictions put in place by one entity or government, which is why a cryptocurrency is a cure to the trade sanctions by the U.S. on Iran. The bill contains a series of sanctions against Iran specifically that are in line with president Trump’s decision to pull out of the Joint Comprehensive Plan of Action.

In the bill, Title III called “Sanctions with Respect to the Development and Use of Iranian Digital Currency” details regulations to prevent any activity involving the use of Iranian cryptocurrency. The bill states, “All transactions related to, provision of financing for, and other dealings in Iranian digital currency by a United States person or within the United States are prohibited.”

Moreover, the bill allows the U.S. president to impose a minimum of 5 sanctions against anyone who knowingly uses Iranian cryptocurrencies. The bill reads, “The President shall impose 5 or more of the sanctions described in section 6(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) with respect to any foreign person that the President determines knowingly engages, on or after the date of the enactment of this Act, in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services, or technological support, used in connection with the development of Iranian digital currency.”

The bill goes on to give the president powers to place sanctions against any foreign person or entity that participates in Iranian cryptocurrencies.

“(a) IN GENERAL .—The President may impose the sanctions described in subsection (b) with respect to a foreign person if the President determines that the foreign person, on or after the date of the enactment of this Act—

(1) knowingly conducts or facilitates any significant transaction related to the purchase or sale of Iranian digital currency or a derivative, swap, future, forward, or other similar contracts the value of which is based on the exchange rate of Iranian digital currency; or

(2) maintains significant amounts denominated in Iranian digital currency outside the territory of Iran.”

With new laws and regulations being introduced by practically every major government, this is another step in the direction of controlling the fallout of cryptocurrencies. Cryptocurrencies are based on blockchain technology, which is an open source technology; meaning anyone can build their own cryptocurrency. It seems that the government is finally starting to catch up with laws and regulations to prevent their adversaries from utilizing the powers of blockchain to fund the projects that the U.S. stands against.

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