Biden Administration To Establish Crypto Legal Framework Soon

By Kevin • January 30, 2023 3:50 pm • Comments

The Biden Administration just revealed that they have plans to establish a legal framework for cryptocurrencies in the next few months.

Many within the crypto community see this as something that has been needed for a long time in order for the industry to be able to safely attract investors and to foster future growth.

This happens to be the first time that the White House has developed a framework given that the administration has been researching the topic for a long time.

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The fact that it shared that it will release information in the coming months also seemed a lot earlier than many expected and many believe that recent events in the industry may have accelerated those plans.

The administration has already revealed that the framework will be extremely focused on identifying risks and preventing fraud.

Watcher.guru reports:

The statement notes that the aforementioned framework, “identifies clear risks.” Addressing unnamed crypto companies that, “ignore applicable financial regulations and basic risk controls,” according to the White House.

Furthermore, the framework will address cybersecurity questions, as well as cryptocurrency platforms that “mislead consumers, have conflicts of interest, fail to make adequate disclosures, or commit outright fraud.”

The statement acknowledges some agencies that “ramp up enforcement where appropriate, and issue new guidance where needed.”

Yet, maintains that “the events of the past year underscore that more is needed.”Conclusively, the administration notes its intention to “keep driving forward the digital-assets framework we’ve developed,” alongside Congress.

Other events that happened last year which may have served for a catalyst for this new legal framework may have been the collapse of the stable coin Luna.

Events such as those have caused many investors to lose their capital and the aim will likely be to figure out a way to prevent such scenarios from happening again in the future.

Whether or not the SEC will be aligned with the Biden’s administration’s vision is still unknown as the SEC has built a reputation for regulating the crypto industry based on its own interpretation of unclear regulatory guidelines.

Perhaps the new framework will help address this problem for the crypto community, but speculators will ultimately have to wait for the framework to be released to the public first.

BitcoinMagazine concludes:

Therefore, the Administration will reveal priorities for further research devoted to digital assets and development, “which will help the technologies powering cryptocurrencies protect consumers by default.”

The post also details the Administrations’ belief that Congress needs to step up efforts by expanding regulators’ powers, strengthening transparency and disclosure requirements, funding greater law-enforcement capacity building and limiting cryptocurrencies’ risks to the financial system.

It is careful to note that Congress should not greenlight mainstream institutions like pension funds to dive headlong into cryptocurrency markets as this would deepen the ties between cryptocurrencies and the broader financial system and increase systemic risks.

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