Senator Jack Reed has introduced an amendment to the GENIUS Act in the Senate, aiming to overturn a recent ruling by the Fifth Circuit on Tornado Cash sanctions. The amendment seeks to expand the powers of the President and the Office of Foreign Asset Control (OFAC), allowing them to prohibit Americans from using certain smart contracts, regardless of any actual link to sanctioned foreign entities.
The proposed language in Senator Reed's amendment grants broad authority to the President, enabling arbitrary bans on American use of blockchain-enabled smart contracts or similar technologies. The current authority of OFAC and the President is limited to sanctioning foreign persons or property with a foreign interest. However, this amendment introduces a new definition of "interest," encompassing any potential connection to a sanctioned person, even if it is coincidental or hypothetical.
Critics argue that such vague connections could lead to unwarranted restrictions. Questions arise about whether countries like Iran or North Korea could be perceived as having indirect interests in open-source software or blockchain technology under this broad definition. This raises concerns about granting unrestrained power without due process or accountability.
The implications of this amendment are significant, potentially impacting how executive power is exercised over open-source software and blockchain technologies in the United States.
