2022 was a very difficult year for crypto enthusiasts as well as for the crypto industry. The year was packed with many sad and unexpected incidents for the crypto market. Many unforeseen events took place in the crypto space, including the fall-down of exchanges, a downturn in the price of crypto assets, and an ecosystem collapse resulting in a harsh crypto winter. But it now looks like crypto autumn could be a happy sunrise for investors.
On January 27, the US White House released a confirmation on its official website, showing that the US presidential administration called for its comprehensive framework and inspired regulators and Congress to crack down on crypto.
The released statement has provided a guideline for United States President Joe Biden’s administration to reduce the risks connected with cryptocurrencies. Much of the document was addressed to the US Congress, along with the administration’s legislative guidance.
Many investors lost their surplus amount due to the harsh crypto winter last year. The collapse of FTX has caused some investors to lose their entire life savings. Because of all these sad incidents, Mr. Biden wants to tighten the rules and regulations of crypto assets.
Authors of the statement highlighted that “ As an administration, our focus is on continuing to ensure that cryptocurrencies cannot undermine financial stability, to protect investors, and to hold bad actors accountable.”
Further, they added that as per President Biden’s directives, the administration has spent the past year identifying the drawbacks of cryptocurrencies and taken action to reduce them using the authority of the executive branch.
The first module of the guideline is based on the first-ever regulatory framework created to regulate crypto assets within the United States, issued on September 27, 2022. This shows that the administration has created the first-ever framework for developing digital assets in a secure, responsible manner while mitigating risks.
The second element is that executive agencies are increasing enforcement and issuing new guidelines where needed. As noted in the statement, the banking agency earlier this month issued joint guidance on the all-important separation of risky digital assets from the banking system.
According to the statement, “ Agencies across government have launched- or are now- developing- public-awareness programs to help consumers understand the risks of buying cryptocurrencies.”
Specifically, the statement went on to issue a wish list of actions the administration would like to see from Congress, saying, “ Congress should expand regulators’ powers to prevent misuse of customers’ assets.” Legislators have a long list of tasks in the White House. Its recommendations include:
- Expanding the powers of regulators.
- Strengthening disclosure requirements.
- Strengthening penalties for misconduct.
- Increased funding for law enforcement.
The authors also urged Congress not to act, saying “the legislation should not greenlight mainstream institutions, such as pension funds, to dive headlong into cryptocurrency markets.”
The statement’s authors also guarantee that the administration will generously support responsible technological innovations that make financial services cheaper, faster, safer and more accessible.