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 harassed crypto-friendly financial institution Silvergate.
“We received’t touch upon Silvergate particularly, however it’s clearly solely the most recent firm within the cryptocurrency subject 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 realize, this can be a president that has repeatedly known as on Congress to take motion to guard on a regular basis People from the chance posted by digital belongings.”
“And he’ll proceed to take action. So received’t converse to this explicit firm as we now have not on different cryptocurrency firms. However we’re going to proceed monitoring the studies and clearly we’re conscious of the state of affairs.”
FTX’s Collapse Results in Silvergate’s Asset Liquidation
In November of final yr, FTX, a preferred cryptocurrency change, 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 following withdrawal of buyer deposits, Silvergate was pressured 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 carefully 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 firms like Silvergate.
President Biden’s administration has proposed new rules 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 forestall cash laundering and different unlawful actions.
The proposed rules have been met with each help and opposition from the cryptocurrency group. Whereas some imagine elevated regulation is critical to guard customers and forestall fraud, others argue that it may 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 chief order highlights apprehensions relating to digital belongings from the Biden administration and their interdependence with the standard monetary market, doubtlessly inflicting financial instability by means of 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 towards unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”