“Regulators should have more power,” the White House says of cryptocurrencies

“Regulators should have more power,” the White House says of cryptocurrencies

Citing the LUNA stablecoin implosion in May and the collapse of exchange FTX in November, the White House urged Congress to empower regulators to protect investors.

In addition to mentioning financial risks, the text also points to environmental issues, likely referring to cryptocurrency mining as the US is the largest center of this industry today.

Back in September last year, the White House had already addressed this topic, noting that Bitcoin was responsible for the industry’s largest use of electricity. So the threat remains, especially now that Ethereum has left mining.

The White House does not want traditional institutions to dive into cryptocurrencies

Another point raised by the White House is related to the involvement of traditional financial institutions in cryptocurrencies. Basically, the document states that restrictions prevented contagion between them.

“The legislation should not give the green light to traditional institutions such as pension funds to plunge headlong into cryptocurrency markets.”

“In the past year, the limited exposure of traditional financial institutions to cryptocurrencies has prevented the crypto turmoil from infecting the wider financial system”points to the White House text. “It would be a serious mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the wider financial system.”

The excerpt ties in with the idea that US banks are being pressured to cut ties with cryptocurrency companies. After all, at least two major banks were largely hit by the FTX default and had to turn to the Fed for help in handling the damage.

More is needed, says the White House

In stressing that the banks themselves are coming together to “separate digital assets” from the rest of their finances, the White House argues that this is not enough, especially in the areas of money laundering, terrorist financing and risks to the public sector. end consumer.

“But the events of the past year underline that more is needed.”

“Congress must also make efforts”points to the White House. “Congress, for example, should expand the powers of regulators to prevent misuse of client assets — which harm investors and distort prices — and reduce conflicts of interest.”

The excerpt above pertains to FTX, accused by the SEC of using its clients’ money to fund operations at another Sam Bankman-Fried company, Alameda Research.

Therefore, we can expect stricter regulation from the US, which could be beneficial for the end user. Meanwhile, rumors suggest that China is going in the opposite direction and may be opening itself up to cryptocurrencies again. As such, we can expect Bitcoin price to follow the flow of this news this year.

Source: Live Coins