A blog post was co-written by national security adviser Jake Sullivan, director of the National Economic Council Brian Deese, director of the Office of Science and Technology Policy Arati Prabhakar, and chair of the Council of Economic Advisors Cecilia Rouse on the official White House website targets cryptocurrencies and calls for stronger enforcement by regulators.
According to a Jan. 27 blog post on the White House website, some of the risks associated with the cryptocurrency market include North Korea, fraud, and financial losses. It urged for more thorough regulation of cryptocurrencies in general and asked politicians in Congress and financial regulators for assistance.
The blog described the administration’s approach to reducing the risks connected with cryptocurrencies and was co-written by national security adviser Jake Sullivan, director of the National Economic Council Brian Deese, director of the Office of Science and Technology Policy Arati Prabhakar, and chair of the Council of Economic Advisors Cecilia Rouse.
The White House officials identified the digital asset market as a young, promising sector that has to be controlled for the benefit of consumers. Cryptocurrencies have long been a source of concern for Sullivan, who brought them to the administration’s attention in June 2021 as a result of the well-known ransomware attack on the Colonial Pipeline.
The White House used North Korea as evidence for the need for additional legislation, emphasizing that the country was able to “steal over a billion dollars to fund its aggressive missile program” due to lax security measures. This is in reference to claims made by the top intelligence agency of South Korea that its northern neighbor used state-sponsored hackers to steal $1.2 billion from various digital asset initiatives.
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The Biden administration also seems to be targeting “privacy coins”—cryptocurrencies that algorithmically “wash” transactions to obscure their ownership history. The briefing included a link to a 2022 study (pdf below), which identified privacy coins under the section on “Malicious Acts” and stated that these tokens are the go-to form of payment for criminals and other undesirable actors.
One of the main tenets supporting the crypto movement, according to supporters of the well-known privacy coin Monero, is the ability to conduct transactions anonymously.
In order to help reduce criminal activities in the digital asset sector, the White House encouraged Congress to adopt new laws. Stronger sanctions for illegal financial connections and more transparency standards for businesses involved in cryptocurrencies were suggested.
The blog also placed a lot of emphasis on the drive to collaborate with international legislators. Many claims that foreign countries with lax legal systems are responsible for much of the fraud in the industry.
“These foreign exchanges have virtually no regulation,” macroeconomic strategist Jim Bianco said in an interview with Wealthion.
Watch the interview in the video below:
However, Bianco acknowledged the danger that regulators might be taken over by the businesses they’re meant to control, citing FTX founder Sam Bankman-Fried as an example.
“A lot of people in the industry were very uncomfortable with him because they didn’t think he represented the best interests of the industry,” he said. “He was going to use his vision of regulation to build a moat around FTX.”
Another subject of the blog was the need for care in regulation. Officials from the White House issued a warning against passing regulations that might encourage more cryptocurrency investment.
“Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets,” the blog reads. “It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.”
According to the retirement planning website Equable, the FTX implosion in the fall of 2022 resulted in losses for at least 15 state and local pension funds. The disastrous crypto exchange resulted in a $95 million loss for the Ontario Teachers’ Pension Plan.
By making an investment in the now-defunct cryptocurrency network Celsius, which filed for bankruptcy in July 2022, another Canadian pension fund lost $150 million.
However, some economists believe that regulations would do nothing to protect investors and would burden taxpayers needlessly.
According to Peter Schiff, chief economist of Euro Pacific Asset Management, “We don’t need more government regulation.” “We need more free market regulation and personal responsibility.”
Read the report given below: