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 confused crypto-friendly financial institution Silvergate.
“We received’t touch upon Silvergate particularly, however it’s clearly solely the newest firm within the cryptocurrency subject to expertise vital points,” the press secretary mentioned.
“In latest weeks, banking regulators have launched pointers on how banks ought to shield themselves from dangers related to crypto. As you already know, it is a president that has repeatedly known 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 received’t communicate to this explicit firm as we have now not on different cryptocurrency corporations. 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 alternate, collapsed, leaving excellent money owed of billions to its collectors. A type of collectors was Silvergate, a financial institution that supplied providers to FTX. Because of FTX’s collapse and the next withdrawal of buyer deposits, Silvergate was compelled to liquidate belongings 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 affect 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 corporations like Silvergate.
President Biden’s administration has proposed new laws that will require cryptocurrency exchanges to report transactions over $10,000 to the Inner Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to forestall cash laundering and different unlawful actions.
The proposed laws have been met with each help and opposition from the cryptocurrency neighborhood. Whereas some imagine elevated regulation is critical to guard shoppers and forestall fraud, others argue that it might stifle innovation and hurt the expansion of the business.
In September 2022, the White Home launched the framework for cryptocurrency regulation primarily based on the sooner govt order from President Biden.
The manager order highlights apprehensions concerning digital belongings from the Biden administration and their interdependence with the standard monetary market, probably inflicting financial instability by way of contagion results.
In response to 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.”