According to the Washington Post, the US Treasury Department has approached the administration of President Biden with a proposal to tighten regulation of crypto. In order to shield investors from the risks of volatility in this market. The need for this arose after the capitalization of digital assets dipped by $ 1 trillion in 10 days. From mid-April to mid-May, the digital asset market almost halved.
For its part, the White House plans to close other gaps in the legislation on the circulation of digital assets. So it took a break to conduct comprehensive consultations on this issue.
The administration is currently trying to find regulatory gaps in the crypto market. That can be used to facilitate money laundering or terrorist financing. Officials are also discussing introducing fences for medium-sized retail crypto investors that would provide more protection.
However, according to someone familiar with the matter, the administration sees no threat to the stability of the financial system.
“They are aware of the fact that there are all sorts of abstract risks and things to look out for, but they are still pretty much biding their time”, says the expert.
Moreover, the White House is studying the issue of restrictions on investment in cryptocurrency. At the same time, the authorities want to allow investors “to buy Dogecoin as much as they want”.
The Biden administration is also looking to double the IRS staff amid its push to strengthen cryptocurrency tax compliance.
Cryptocurrencies experienced a massive crash last week. For now, however, federal regulators aren’t concerned about these volatile crypto market fluctuations disrupting broader financial systems, the report said.
Economic Information Daily, published an insider about the likely directions of new regulations that Biden will be asked to adopt.
The first victim will be the mining companies. The fight against which fits well into the environmental agenda of the US President. The miners understand this and have created a coordinating council to reduce and control harmful emissions from BTC mining, but this may not be enough for survival.
Crypto derivatives will be the second to hit, where they will restrict or cancel the use of leverage. The initiative will deal a serious blow to the futures and options of the Chicago Mercantile Exchange, Bakkt and margin trading on a number of US exchanges.
The changes are planned by the Internal Revenue Service (IRS) and OFAC – the Office for Control over Foreign Assets. The White House will try to empower them to identify and punish individual citizens and companies that are trying to evade taxes or violate sanctions with the help of cryptocurrencies.
Reasons for increasing pressure on the crypto industry
The White House study of the crypto market comes after Ohio Senator Sherrod Brown called on the new head of the OCC to increase pressure on the crypto industry. Earlier, Brown expressed concern about the issuance of several banking licenses to cryptocurrency companies by the former management of the OCC. In his opinion, crypto companies do not meet the requirements for banks.