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 careworn crypto-friendly financial institution Silvergate.
“We received’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 stated.
“In latest weeks, banking regulators have launched tips on how banks ought to shield 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 People from the danger posted by digital belongings.”
“And he’ll proceed to take action. So received’t converse to this specific firm as we have now not on different cryptocurrency corporations. However we’re going to proceed monitoring the reviews 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 preferred cryptocurrency trade, collapsed, leaving excellent money owed of billions to its collectors. A type of collectors was Silvergate, a financial institution that offered providers to FTX. On account of FTX’s collapse and the following withdrawal of buyer deposits, Silvergate was compelled to liquidate belongings 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 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 rules that might require cryptocurrency exchanges to report transactions over $10,000 to the Inside Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to stop cash laundering and different unlawful actions.
The proposed rules have been met with each assist and opposition from the cryptocurrency neighborhood. Whereas some imagine elevated regulation is important to guard shoppers and forestall 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 primarily based on the sooner government order from President Biden.
The manager order highlights apprehensions relating to digital belongings from the Biden administration and their interdependence with the standard 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.”
