On March 6, White Home Press Secretary Karine Jean-Pierre was pressed on whether or not the President was monitoring the evolving state of affairs across the pressured crypto-friendly financial institution Silvergate.
“We received’t touch upon Silvergate particularly, however it’s clearly solely the newest firm within the cryptocurrency area to expertise vital points,” the press secretary stated.
“In latest weeks, banking regulators have launched pointers on how banks ought to defend themselves from dangers related to crypto. As you recognize, it is 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 property.”
“And he’ll proceed to take action. So received’t converse to this specific firm as we’ve not on different cryptocurrency firms. However we’re going to proceed monitoring the reviews and clearly we’re conscious of the state of affairs.”
FTX’s Collapse Results in Silvergate’s Asset Liquidation
In November of final 12 months, FTX, a well-liked cryptocurrency trade, 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 pressured to liquidate property valued at $5.2 billion initially of 2023.
White Home’s Stance on Cryptocurrency and Monetary Regulation
The White Home has been intently monitoring the cryptocurrency trade and its influence 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 firms 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 important to guard customers and stop fraud, others argue that it might 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 manager order highlights apprehensions concerning digital property from the Biden administration and their interdependence with the traditional monetary market, doubtlessly inflicting financial instability via 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.”
