Federal Regulators Weigh In on Cryptocurrencies

In the past few weeks, the supervisory authorities have narrowed down on the current status of cryptocurrencies - and not necessarily positively.

While very few official regulations have been released, government officials have made several cautionary statements about the volatility and lack of protection of crypto. They also called for a push to better define the crypto space.

The new administration burdens crypto assets

In the past two weeks, more government officials and agencies have been grappling with perspectives and opinions on crypto assets.

The Federal Deposit Insurance Corporation (FDIC) has published an official request on how banks use digital assets and what the regulator could do to help, according to CoinDesk.

The currency's acting auditor Michael Hsu also ordered a review by his staff of all guidelines of the Trump administration under former acting auditor Brian Brooks, including those relating to cryptocurrencies and digital assets.

Hsu feared that the initiatives put in place under the previous government were unregulated.

“My general concern is that these initiatives have not been carried out in full coordination with all stakeholders. Nor do they appear to have been part of any broader strategy related to the regulatory perimeter. I believe that doing these two tasks should be a priority, ”said Hsu.

Hsu also announced in a congressional hearing that the Federal Reserve, FDIC and OCC are jointly discussing the creation of an inter-agency group on current crypto policy.

The following day, Federal Reserve Chairman Jerome Powell stated that he believed the Federal Reserve’s creation of a digital currency, to be discussed further in a white paper due out this summer, would protect the US Consumers should ensure and give priority.

SEC chairman comments on crypto

On the same day, according to CNBC, SEC chairman Gary Gensler warned the Financial Industry Regulatory Authority conference of impending enforcement across the board.

"We must do everything in our power to ensure that bad actors don't play with the savings of working families and that the rules are aggressively and consistently enforced," said Gensler.

Regarding crypto, he added that "this is a fairly volatile, one could say very volatile, asset class and the investing public would benefit from more investor protection on the crypto exchanges."

The Treasury Department also released a tax plan, which, among other things, addressed the "significant detection problem" that currently exists with the use of crypto for illegal activities. The recent hacking and ransom subsequently paid in Bitcoin, a major oil pipeline in the United States, is a prime example of the types of activity that federal regulators would crack down on.

“There are many challenges and gaps for investor protection in Markets, ”Gensler said when speaking to the House of Representatives subcommittee on financial services, as reported in the Financial Times.

While there are currently over a dozen crypto asset ETFs before the SEC, none have been approved yet. Increasing movements and comments from regulators involved in crypto assets could lead to a broader and clearer stance on digital assets, but no new guidelines have been issued so far.

For more news, information and strategies, visit the Crypto Channel.

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