Four senior officials in U.S. President Joe Biden’s administration called for Congress to “step up its efforts” in regulating the cryptocurrency market in an announcement published on Friday.
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Fast facts
- The officials warned it would be a “grave mistake” to enact legislation that would deepen ties between crypto and traditional finance due to the risk of broader connotation
- “In the past year, traditional financial institutions’ limited exposure to cryptocurrencies has prevented turmoil in cryptocurrencies from infecting the broader financial system,” wrote the four officials: 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.
- The announcement comes following what the White House referred to as a “tough year for cryptocurrencies.” The industry may remember 2022 as the year when Terra-Luna’s algorithmic stablecoin broke down in May, and the fall of the Bahamas-based crypto exchange, FTX.com.
- The report also urged Congress to expand regulators’ powers to protect customer assets, increase transparency and reporting requirements for crypto companies and pass stablecoin legislation.
- Last week, Commodity Futures Trading Commission Commissioner Kristin Jonson called for Congress to expand the agency’s authority to conduct due diligence on any firm looking to purchase a minimum 10% stake in a registered market participant.
- The U.S. House of Representatives created a new congressional subcommittee focused on digital assets in mid-January, as one of its first moves under the control of the Republican Party.
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