US President sets framework to regulate cryptocurrency

President Biden has currently released its first-ever framework on what crypto regulation in the world should look like — including ways in which the financial services industry should evolve to make borderless transactions easier, and how to crack down on fraud in the digital asset space of the world

His new directives tap on the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but not been mandated yet.

The ever lasting direction from the white House has, indeed, captured the attention of both the crypto industry as a whole as well as investors in this nascent asset class.

Shortly are some stipulated key takeaways from the White House’s new crypto framework regulations.

Fighting illicit finance(Crypto)

Number one aspect of the White House’s new framework regulations on cryptocurrency for investment has a great focuses on eliminating illegal activity in the industry and also targets on proposed measures appearing to have real teeth.

White House will eventually evaluate whether to call upon Congress to amend the Bank Secrecy Act, anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers inclusive of the digital asset exchanges and the nonfungible token (NFT) platforms,

Biden while contemplating if to push Congress to raise the penalties for unlicensed money transmitting, as well as potentially amending certain federal statutes to allow the Department of Justice to carryout judgement on digital asset crimes in any jurisdiction where a victim of such crimes is found.

According to facts sheet gathered, the Treasury will have to complete an illicit finance risk assessment on decentralized finance by the end of February 2023 and an assessment on non-fungible tokens by July 2023

Research conducted by the Federal Trade Commission discovered that more than $1 billion in crypto has been lost to fraud since the start of 2021

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As of August, 2022, 11 people were charged for their roles in creating and promoting a fraudulent cryptocurrency for investment pyramid and Ponzi scheme that raised more than $300 million from the millions of retailed investors nation wide, with the USA inclusive.

Meanwhile, in February, U.S. officials seized $3.6 billion worth of bitcoin  their biggest seizure of cryptocurrencies ever related to the 2016 hack of popular cryptocurrency for investment exchange knwon as Bitfinex

Recently, there are many different types of digital U.S. dollars sitting in commercial bank accounts across the country such as electronic U.S. dollars, and is partially backed by reserves, under a system known as fractional-reserve banking. As it name is mentioned transferring this form of money from one bank to another or from one country to another is considered on legacy financial rails.

Recall in May this year, there was a massive collapse in Terra USD, which is one of the most popular U.S. stablecoin dollar pegged projects, cost investors tens of billions of dollars as they pulled out in a panic that some have compared to a bank run of past.

White House noted that the implosion of this stablecoin project led to a series of insolvencies that erased nearly $600 billion in wealth

In conclusion, for stablecoins to be”safer,” the administration pointed that the Treasury will shall work with financial institutions to bolster their capacity to identify and mitigate cyber vulnerabilities by sharing information and promoting a wide range of data sets and analytical tools, and in same vein they should team up with other agencies to “identify, track, and analyze emerging strategic risks that relate to digital asset markets.”

In collision efforts, it ought to happen in concert with international allies, including the Organization for Economic Cooperation and Development (OECD) and the Financial Stability Board (FSB) all instituted in the US.

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