Written by Steve Cannon for USSA News.
The White House is calling for increased oversight of cryptocurrencies, warning of the potential dangers posed by the rapidly growing sector. In a recent blog post, four top officials from the National Economic Council, Office of Science and Technology Policy, Council of Economic Advisers, and National Security Adviser outlined the executive branch’s plan to address the risks associated with cryptocurrency.
Cryptocurrency Ignores Applicable Regulations and Basic Risk Controls
The White House officials cited several examples of the dangers posed by cryptocurrency, including the collapse of the TerraUSD stablecoin and the crypto exchange FTX, as well as poor cybersecurity that allowed North Korean hackers to steal $1.2 billion in digital assets. They warned that some cryptocurrency companies ignore financial regulations and basic risk controls, leading to conflicts of interest, consumer misinformation, and even fraud.
Regulators Must Ramp Up Enforcement and Protect Consumers
The White House called on regulators to ramp up enforcement and issue new guidance to address these risks and limit financial institutions’ exposure to digital assets. It also encouraged agencies to launch public awareness programs to help consumers understand the risks of buying cryptocurrencies.
White House Urges Congress to Step Up Efforts
The officials also exhorted Congress to pass new laws to help curb criminal activity in the crypto space. They suggested expanding regulators’ powers, increasing transparency and disclosure requirements, strengthening penalties for violating illicit finance rules, and collaborating with international partners for greater law enforcement capacity. However, they warned that legislation should not lead to greater mainstream investment in crypto markets, as this could increase the risk of infecting the broader financial system.
Macroeconomic Strategist Sounds the Alarm on Regulator Co-Option
Jim Bianco, a macroeconomic strategist, warned that there is a risk that regulators may become co-opted by the same companies they are mandated to regulate, citing the example of the now-disgraced FTX founder.
Peter Schiff Calls for Free Market Regulation and Personal Responsibility.