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 gained’t touch upon Silvergate particularly, however it’s clearly solely the most recent firm within the cryptocurrency discipline to expertise vital points,” the press secretary mentioned.
“In latest weeks, banking regulators have launched tips on how banks ought to defend themselves from dangers related to crypto. As you realize, this can be a president that has repeatedly referred to as on Congress to take motion to guard on a regular basis Individuals from the danger posted by digital belongings.”
“And he’ll proceed to take action. So gained’t communicate to this specific firm as we’ve got not on different cryptocurrency corporations. However we’re going to proceed monitoring the stories 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 change, 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 belongings valued at $5.2 billion at first of 2023.
White Home’s Stance on Cryptocurrency and Monetary Regulation
The White Home has been intently monitoring the cryptocurrency trade and its affect 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 corporations like Silvergate.
President Biden’s administration has proposed new laws that may require cryptocurrency exchanges to report transactions over $10,000 to the Inner Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to stop cash laundering and different unlawful actions.
The proposed laws have been met with each help and opposition from the cryptocurrency neighborhood. Whereas some consider elevated regulation is critical to guard customers and forestall fraud, others argue that it may stifle innovation and hurt the expansion of the trade.
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 concerning digital belongings from the Biden administration and their interdependence with the standard monetary market, doubtlessly inflicting financial instability via 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 in opposition to unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”
