The U.S. government has asked law enforcement to escalate efforts to keep an eye on the cryptocurrency space. Biden’s administration forwarded a meticulous plan to address the eminent crypto currency risks, a blog reported last week. This will call on authorities and Congress to summon enforcement appropriately to boost their efforts in managing the industry.
The official blog mentioned last year’s major pitfalls within cryptocurrency; the collapse of an algorithmic stablecoin, which created a tsunami wave of insolvencies; and the infamous fall of a cryptocurrency giant, the renowned FTX, which caused users and investors untold investment losses in billions.
In all this, thankfully, the impact was negligible on the larger financial sector. The U.S. government has been keen on reducing the risks within the cryptocurrency industry so that these risks don’t hamstring the finance sector. To this end, the federal government has mapped out a plan to develop digital assets responsibly while working on the said risks.
The government, under President Joseph Biden’s direction, spent last year pinpointing cryptocurrency risks and working to mitigate them using the relevant authorities provided by the executive branch of the administration. The risks identified include fallacious statements, little to no regulations to apply within the industry, and lack of safety or cybersecurity that gave a loophole for North Korea to steal more than $1 billion to fund its missile program.
Biden’s administration has tasked agencies to rally enforcement appropriately to combat these said risks. The government wants Congress to heighten efforts for crypto market regulation. Congress has been asked not to allow institutions such as pension funds tinkering into the crypto market because this would forge deeper ties between the larger financial system and cryptocurrencies, thereby increasing risks. Such would be a grave mistake if Congress would pass enabling laws that would encourage deeper ties. Keeping pension funds out would avert the misuse of clients’ assets and curtail conflict of interest.
Brian Deese, A. Prabhakar, C. Rouse and J. Sullivan are some of the White House advisors who authored the blog and concluded that Biden’s administration supports accountable technological innovations that support financial services to be faster, cheaper more accessible and safer despite the potential risks involved.
“If the safeguard chips fall in the right places, we will endeavor to push forward our developed framework for digital assets while working with Congress to achieve the set goals,” the post avowed.
Regulatory guidelines would definitely do industry actors such as Canaan Inc. (NASDAQ: CAN) a lot of good because they would be able to plan long-term, well aware of the rules they are expected to abide by in different markets.
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