On Friday, the Biden administration asked the United States Congress to expand regulators’ authority in policing the crypto industry. Four senior White House officials published a statement titled ‘The Administrations Roadmap to Mitigate Cryptocurrencies’ Risks.’ It urged Congress to “step up its efforts” in crypto market regulations.
Contents of the statement
The administration’s primary focus is to ensure cryptocurrencies don’t undermine financial stability. At the same time, industry players should protect investors with structures to hold bad actors accountable. In that regard, the four officials want Congress to expand regulators’ powers to prevent the misuse of clients’ assets. This will also mitigate conflicts of interest.
The statement suggested that Congress strengthens transparency and disclosure requirements for crypto companies. It also recommended stiffer penalties for individuals or firms violating laid down rules.
In the same statement, the officials listed things Congress should avoid when crafting new crypto regulations. It discouraged green-lighting mainstream financial institutions like pension funds from crypto exposure. The officials warned that doing so would be a great mistake that would deepen ties between cryptocurrency and the broader, global financial system.
The report mentioned the fall of LUNA’s stablecoin, UST, and the collapse of FTX, a cryptocurrency exchange. These two are some of the events that qualify 2022 as a “tough year for crypto.”
In the same report, officials note that most crypto entities ignore applicable financial regulations and basic risk control procedures. Officials also alleged that crypto firms are notorious for misleading consumers. They cite conflict of interest, failure to disclose information adequately, and fraud.
The responsibility of cryptocurrency regulation
Nonetheless, the burden of crypto regulation doesn’t fall on Congress alone. In the report, the officials said the White House would disclose priorities for digital assets research development soon.
Concerns and recommendations of the White House are almost similar to what U.S. regulators’ remarked. For example, Commodity Futures Trading Commission (CFTC) commissioner Kristin Johnson urged legislators to push for additional crypto acquisition reviews.
The administration supports responsible technological inventions that make service dispensation cheaper, safer, and more accessible. Also, safeguards will ensure that new technologies are secure and beneficial to everyone, not just a few people.