On March 6, White Home Press Secretary Karine Jean-Pierre was pressed on whether or not the President was monitoring the evolving state of affairs across the pressured crypto-friendly financial institution Silvergate.
“We received’t touch upon Silvergate particularly, however it’s clearly solely the newest firm within the cryptocurrency subject to expertise vital points,” the press secretary mentioned.
“In current weeks, banking regulators have launched tips on how banks ought to shield themselves from dangers related to crypto. As you already know, this can be a president that has repeatedly known as on Congress to take motion to guard on a regular basis People from the danger posted by digital property.”
“And he’ll proceed to take action. So received’t converse to this explicit firm as we have now not on different cryptocurrency firms. However we’re going to proceed monitoring the reviews and clearly we’re conscious of the state of affairs.”
FTX’s Collapse Results in Silvergate’s Asset Liquidation
In November of final yr, FTX, a preferred cryptocurrency trade, collapsed, leaving excellent money owed of billions to its collectors. A kind of collectors was Silvergate, a financial institution that offered providers to FTX. On account of FTX’s collapse and the following withdrawal of buyer deposits, Silvergate was pressured to liquidate property valued at $5.2 billion in the beginning of 2023.
White Home’s Stance on Cryptocurrency and Monetary Regulation
The White Home has been carefully monitoring the cryptocurrency business and its influence on the monetary markets. In current months, there have been requires elevated regulation of cryptocurrencies to stop occasions just like the collapse of FTX and the ensuing fallout for firms like Silvergate.
President Biden’s administration has proposed new laws that will require cryptocurrency exchanges to report transactions over $10,000 to the Inside Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to stop cash laundering and different unlawful actions.
The proposed laws have been met with each help and opposition from the cryptocurrency group. Whereas some consider elevated regulation is important to guard shoppers and forestall fraud, others argue that it might stifle innovation and hurt the expansion of the business.
In September 2022, the White Home released the framework for cryptocurrency regulation based mostly on the sooner executive order from President Biden.
The chief order highlights apprehensions concerning digital property from the Biden administration and their interdependence with the traditional monetary market, doubtlessly inflicting financial instability by contagion results.
In line with the framework:
“The President will consider whether or not to name upon Congress to amend the Financial institution Secrecy Act, anti-tip-off statutes, and legal guidelines towards unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”
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