Responses to President Biden’s executive order on cryptocurrency are due. The Washington Post reports the US Treasury Department will push for sweeping regulations for crypto. Recent heists have highlighted the dangers of lax rules for the fledgling financial sector.
The US Treasury crypto reports
According to WaPo, the Treasury will make four reports on the matter throughout the month, highlighting crypto’s potential dangers. Cryptocurrency fraud is a significant issue at hand. Crypto scams have run rampant since digital currency hit the mainstream. Hackers stole about $1 billion in crypto between January 2021 and March 2022. However, WaPo says the Treasury’s report determined crypto does not pose a threat to “the broader financial system” yet. Though, that could change.
“We mostly see a predatory model similar to what we saw in the run-up to the 2008 financial crisis,” Americans for Financial Reform crypto specialist Mark Hays told WaPo. “We hope the report finds a way to communicate the scale and severity of that potential harm.”
Stablecoins are a significant focus of the Treasury’s report. Stricter laws for cryptocurrency tied to the United States dollar are already underway. The collapse of Terra USD, a major factor in the current crypto winter, emphasized the need for stablecoin regulation.
Which federal agency gets jurisdiction over crypto?
Securities Exchange Commission Chairman Gary Gensler has recently cracked down on crypto. The SEC’s crypto division has filed 200 lawsuits since its establishment. However, nearly 90% have settled out of court. Nevertheless, Gensler’s been the target of severe backlash for his approach to digital currency.
Though, it seems the Commodity Futures Trading Commission is the more popular regulatory agency to govern crypto. According to WaPo, lawmakers introduced three bipartisan bills pushing for the CFTC to lead crypto regulation this year. However, the Treasury has yet to lend support to either agency.
