US Chalks Out Plan to Combat Crypto Fraud
The Biden Administration announced on January 27th that it will launch a new legal framework for cryptocurrencies in the coming months to combat the numerous cryptocurrency scams that impacted the crypto market last year, causing multi-million-dollar losses.
“2022 was a tough year for cryptocurrencies,” according to a White House statement. As a result, the new regulatory framework aims to ensure that cryptocurrencies do not jeopardize the financial stability of the United States.
Among the measures that the US Congress may take through the new cryptocurrency regulatory framework to “redouble its security efforts” are: expanding regulators’ powers to prevent asset misuse; strengthening transparency and disclosure requirements for crypto companies; and toughening penalties for violating rules on illicit financing, among others.
It also seeks to protect investors by instituting new “liability requirements” for those who commit criminal acts. Although these measures are not fully contemplated in the new regulatory framework, they show that regulators will not tolerate malicious actors going unpunished.
According to court filings, the White House emphasized that President Biden is working to avoid new scams similar to the FTX scandal, which was perpetrated by the company’s former CEO, Sam Bankman-Fried, and caused thousands of Americans to lose billions of dollars.
The Administration is dedicated to protecting American investors and consumers from financial crime and fraud. It is also actively working with international partners to combat cryptocurrency fraud. Shortly after the White House announcement, the FED issued a press release outlining new cryptocurrency rules for banks (with or without FDIC protection).
To achieve this goal, the Administration will also take steps to strengthen the regulatory structure surrounding digital assets and cryptocurrencies, such as strengthening Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, as well as implementing other consumer and investor protection measures. In addition, the White House stated that it will collaborate with Congress to provide additional regulatory oversight and enforcement tools to better protect American consumers and investors.
The goal is to create a safe and transparent environment for the digital asset and cryptocurrency industries to grow and develop. The announcement by the Biden Administration demonstrates that the US government is committed to protecting American investors and consumers from fraud and financial crime and actively working with international partners to combat the illicit use of cryptocurrency. But it is doing it his way, despite Republican opposition.
(With inputs from Shikha Singh)
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