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 burdened 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 defend themselves from dangers related to crypto. As , this can be a president that has repeatedly referred to as on Congress to take motion to guard on a regular basis People from the chance posted by digital property.”
“And he’ll proceed to take action. So received’t converse to this explicit firm as we’ve got not on different cryptocurrency firms. However we’re going to proceed monitoring the studies and clearly we’re conscious of the scenario.”
FTX’s Collapse Results in Silvergate’s Asset Liquidation
In November of final 12 months, FTX, a well-liked cryptocurrency trade, collapsed, leaving excellent money owed of billions to its collectors. A type of collectors was Silvergate, a financial institution that offered providers to FTX. On account of FTX’s collapse and the following withdrawal of buyer deposits, Silvergate was pressured to liquidate property valued at $5.2 billion firstly 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 forestall occasions just like the collapse of FTX and the ensuing fallout for firms like Silvergate.
President Biden’s administration has proposed new rules that will require cryptocurrency exchanges to report transactions over $10,000 to the Inside Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to forestall cash laundering and different unlawful actions.
The proposed rules have been met with each help and opposition from the cryptocurrency neighborhood. Whereas some consider elevated regulation is critical to guard shoppers and stop fraud, others argue that it may stifle innovation and hurt the expansion of the business.
In September 2022, the White Home launched the framework for cryptocurrency regulation based mostly on the sooner government 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 keeping 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 towards unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”
