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President Joe Biden's administration releases a number of reports outlining policy proposals for regulating digital assets, and has expressed alarm over recent developments in the cryptocurrency markets.
A number of US government publications expected to provide light on the President Joe Biden administration's and regulators' intentions regarding digital assets have been keenly anticipated by the cryptocurrency industry. The majority of the records are now public, but the situation is still unclear.
The Treasury Department's three reports, which were all released on Friday, largely urge the government to keep assessing the risks associated with cryptocurrencies, carry out enforcement actions as planned, and move the development of a digital dollar forward without suggesting the US should adopt one.
Biden Administration Releases First-Ever Framework for Crypto Regulation
The reports are in response to President Joe Biden's executive order on digital assets, signed in March, which instructed federal agencies to examine various aspects and problems surrounding the cryptocurrency ecosystem and offer recommendations for how the US can both lead the global digital asset sector and address any risks to consumer protection or monetary stability posed by the developing industry. Agencies will release a total of 21 reports.
Over the past few months, reports from the Treasury Department, the Justice Department, and the White House Office of Science and Technology Policy have all been released. Friday saw the release of three further Treasury reports as well as what the White House referred to as its first-ever framework for the responsible development of digital assets.
National Security Advisor Jake Sullivan and Director of the National Economic Council Brian Deese stated that the various studies express concerns about consumer protections and illegal activity and offer solutions for the government to address these problems, per Finance.
Gary Gensler, the chairman of the Securities and Exchange Commission, stated in a speech last week that most crypto projects in the US are now operating in violation of federal securities law and pose a risk to the well-being of typical investors by failing to follow disclosure regulations.
Biden Urges Congress To Penalize Unlicensed Money Transmit
Between Biden's executive order and Friday's claims, there have been several months of tremendous stress on the cryptocurrency markets, with prices of bitcoin ether and other digital assets dropping and a number of crypto companies declaring bankruptcy.
Many investors in the US and other countries have suffered financially as a result of the failures of projects, including Terra, Celsius, and Voyager. These investors made sizable investments before seeing the value of their tokens plummet or having their accounts frozen.
The administration also expressed concern over the potential for digital assets to facilitate illegal finance, such as money laundering, terrorist financing, and other crimes. It was also implied that Biden was considering whether to suggest to Congress that laws like the Bank Secrecy Act, intended to combat financial crime, be updated to take into account crypto innovation.
According to the reports, there is some hope that the sector for digital assets would promote financial innovation and possibly result in new goods and services that will reduce payment costs and broaden financial inclusion.
The president is also considering whether to ask Congress to increase the fines for unauthorized money transmission or to change some federal laws to enable the Department of Justice to pursue crimes involving digital assets in any location where a victim of those crimes is discovered.
The fact sheet states that Treasury will finish its assessment of the risk of illegal finance related to decentralized finance by the end of February 2023 and its examination of non-fungible coins by the end of July 2023.
The market for digital assets is plagued with crime. The Federal Trade Commission's research shows that since the beginning of 2021, more than $1 billion in cryptocurrency has been lost to fraud.
A fraudulent crypto pyramid and Ponzi scam that garnered more than $300 million from millions of retail investors worldwide, including in the US, was the subject of 11 charges, the SEC announced last month. Meanwhile, in February, US authorities made their largest-ever seizure of cryptocurrencies when they confiscated $3.6 billion worth of bitcoin in connection with the 2016 breach of the cryptocurrency exchange Bitfinex, Market Watch via MSN reported.
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