White House report says it would a ‘grave mistake’ to deepen ties between crypto, broader financial system

A new White House report provides additional insight into the mind of the executive branch of the United States federal government when it concerns managing cryptocurrencies.The authors of the Jan. 27 report, members of President Joe Biden’s financial team, recommend that Congress is not acting fast nor effectively enough when it pertains to supplying regulatory explanation to the public, The authors of the report,

Brian Deese, director of the National Economic Council, Arati Prabhakar, director of the White House Office of Science and Technology Policy, Cecilia Rouse, chair of the Council of Economic Advisors, and National Security Advisor Jake Sullivan– called on Congress to “broaden regulators’ powers to avoid abuses of consumers’ assets … and to alleviate disputes of interest.”

The report added that legislation must be enacted to separate crypto banking from traditional banking, similar to the Glass-Steagall Act of 1933, which separated commercial and financial investment banking.In addition

, the report prompted Congress to act to reduce the types of risky behaviors, albeit without naming names, i.e., Silvergate Capital, the moms and dad business to a crypto bank that held billions in deposits from some of the industry’s most wicked stars, consisting of FTX and Genesis.

Congress might likewise strengthen openness and disclosure requirements for cryptocurrency companies so that financiers can make more informed choices about monetary and ecological risks.

In the wake of significant industry broad collapses from the stablecoin TerraUSD (UST) to the exchange FTX, the report restates that billions of institutional and retail investment money has actually evaporated, causing irreparable harm to investors:

Many everyday investors who relied on cryptocurrency companies– consisting of young people and individuals of color– suffered serious losses.The report also served to fix”the expansion of false or misleading claims about crypto possessions being guaranteed by the Federal Deposit Insurance Corporation,”the White House stated. Duplicating the often-cited White House claim that crypto cybercrime has been utilized

to money North Korea’s ballistic rocket program,” there is poor cybersecurity across the industry that enabled the Democratic People’s Republic of Korea to take over a billion dollars to fund its aggressive rocket program,”the report warned police to be on the lookout for crypto cybercrime that could be used to fund terrorist companies and/or rogue nation-state actors. The administration however offered its assistance and assistance to police in the report, specifying that

“to help police, it [Congress] might strengthen charges for violating illicit-finance rules and subject cryptocurrency intermediaries to restrictions against tipping off crooks.” The report concluded with an alerting to Congress that it would eventually be a”severe mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.”Adding that while a number of these issues are not endemic to the crypto industry writ big, innovation and creativity in the sector should ultimately co-mingle with increased regulatory safeguards and scrutiny. The Administration wholeheartedly supports accountable technological innovations that make monetary services cheaper, much faster, much safer, and more available […] Safeguards will make sure that new innovations are protected and useful to all– and that the new digital economy works for the lots of

, not simply the couple of. Published In: Featured, Regulation Recent White House Stories

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