On March 6, White Home Press Secretary Karine Jean-Pierre was pressed on whether or not the President was monitoring the evolving scenario across the pressured crypto-friendly financial institution Silvergate.
“We received’t touch upon Silvergate particularly, however it’s clearly solely the newest firm within the cryptocurrency area to expertise important points,” the press secretary stated.
“In latest weeks, banking regulators have launched tips on how banks ought to shield themselves from dangers related to crypto. As you understand, it is a president that has repeatedly referred to as on Congress to take motion to guard on a regular basis Individuals from the chance posted by digital property.”
“And he’ll proceed to take action. So received’t converse to this specific firm as now we have not on different cryptocurrency firms. However we’re going to proceed monitoring the reviews and clearly we’re conscious of the scenario.”
FTX’s Collapse Results in Silvergate’s Asset Liquidation
In November of final yr, FTX, a well-liked cryptocurrency alternate, collapsed, leaving excellent money owed of billions to its collectors. A type of collectors was Silvergate, a financial institution that supplied companies to FTX. On account of FTX’s collapse and the next withdrawal of buyer deposits, Silvergate was compelled to liquidate property valued at $5.2 billion in the beginning of 2023.
White Home’s Stance on Cryptocurrency and Monetary Regulation
The White Home has been intently monitoring the cryptocurrency business and its impression on the monetary markets. In latest months, there have been requires elevated regulation of cryptocurrencies to stop occasions just like the collapse of FTX and the ensuing fallout for firms like Silvergate.
President Biden’s administration has proposed new rules that may require cryptocurrency exchanges to report transactions over $10,000 to the Inside Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to stop cash laundering and different unlawful actions.
The proposed rules have been met with each assist and opposition from the cryptocurrency neighborhood. Whereas some consider elevated regulation is important to guard customers and forestall fraud, others argue that it might stifle innovation and hurt the expansion of the business.
In September 2022, the White Home launched the framework for cryptocurrency regulation primarily based on the sooner govt order from President Biden.
The chief order highlights apprehensions relating to digital property from the Biden administration and their interdependence with the traditional monetary market, probably inflicting financial instability by means of contagion results.
In accordance with the framework:
“The President will consider whether or not to name upon Congress to amend the Financial institution Secrecy Act, anti-tip-off statutes, and legal guidelines in opposition to unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”
