White House officials criticize Congress for not enacting crypto regulations

• Four senior White House officials posted a blog yesterday, criticizing Congress for failing to enact cryptocurrency regulations.
• However, crypto regulations have not been the priority of President Joe Biden.

Four senior White House officials posted a blog on 27 January, criticizing Congress for failing to enact cryptocurrency regulations. They asked lawmakers to expedite their efforts to develop a crypto regulatory framework.

The White House blamed Congress for the delay in establishing a comprehensive national crypto regulatory framework, outlining several steps lawmakers could take to combat fraud and bad actors in the crypto sector. The officials believed that the Congress should increase its efforts.

The post highlighted several actions that Congress could take right away to ostensibly improve consumer protection standards in the crypto space, including:

1. Further strengthening the powers of federal regulatory agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)
2. Increasing transparency and disclosure requirements for cryptocurrency companies
3. Assisting law enforcement by increasing funding, toughening penalties for existing finance rules, and improving those rules to penalize intermediaries
4. Enacting legislation to regulate stablecoins.

Biden’s advisers warned that the newly sworn-in Republican House of Representatives could exacerbate the situation by loosening regulations at such a critical juncture.

The note apparently refers to the House Republican leadership’s recent announcement of the new Subcommittee on Digital Assets, Financial Technology and Inclusion.

Biden administration failed to give priority to crypto regulations

However, crypto regulations have not been the priority of President Joe Biden either during the two-year period from early 2021 to some time ago when Democrats controlled the presidency, the House, and the Senate. It was during this period that the crypto industry was rocked by the collapse of UST in May and that of the $32 billion crypto exchange FTX in November.

Several cryptocurrency bills are currently circulating in Washington, but none of them have been voted on. The Senate introduced the Stablecoin TRUST Act in December, which would create a federal regulatory framework for “payment stablecoins.”

The Senate has also been dealing with the Lummis-Gillibrand Responsible Financial Innovation Act since last June, which would give the CFTC the authority to regulate crypto.

The Digital Commodities Consumer Protection Act (DCCPA), introduced last August, would have limited the SEC’s ability to regulate the crypto industry in the same way. Former FTX CEO and founder Sam Bankman-Fried had lobbied hard for it in Washington. Moreover, he had donated tens of millions of dollars to both Republican and Democrat politicians.