Biden administration urges U.S. congress to pursue crypto regulation

Four senior officials in U.S. President Joe Biden’s administration called for Congress to “step up its efforts” in regulating the cryptocurrency market in an announcement published on Friday.

See related article: ECB’s Christine Lagarde: Further crypto regulation ‘absolute necessity’ following FTX collapse

Fast facts

• The officials warned it would be a “grave mistake” to enact legislation that would deepen ties between crypto and traditional finance due to the risk of broader connotation
• “In the past year, traditional financial institutions’ limited exposure to cryptocurrencies has prevented turmoil in cryptocurrencies from infecting the broader financial system,” wrote the four officials: Brian Deese, director of the National Economic Council; Arati Prabhakar, director of the White House Office of Science and Technology Policy; Cecilia Rouse, chair of the Council of Economic Advisors, and National Security Advisor Jake Sullivan.
• The announcement comes following what the White House referred to as a “tough year for cryptocurrencies.” The industry may remember 2022 as the year when Terra-Luna’s algorithmic stablecoin broke down in May, and the fall of the Bahamas-based crypto exchange, FTX.com.
• The report also urged Congress to expand regulators’ powers to protect customer assets, increase transparency and reporting requirements for crypto companies and pass stablecoin legislation.
• Last week, Commodity Futures Trading Commission Commissioner Kristin Jonson called for Congress to expand the agency’s authority to conduct due diligence on any firm looking to purchase a minimum 10% stake in a registered market participant.
• The U.S. House of Representatives created a new congressional subcommittee focused on digital assets in mid-January, as one of its first moves under the control of the Republican Party.

See related article: U.S. midterms: gridlock… and progress on crypto industry regulation?