Washington, D.C. – The White House has issued a set of guidelines aimed at reducing the risks associated with cryptocurrencies. The guidelines, published Friday under the National Economic Council (NEC), urge authorities to increase enforcement and for Congress to increase regulation of the crypto sector. The guidelines also caution against allowing mainstream institutions, such as pension funds, to fully engage in cryptocurrency markets.
“The Administration’s Guidelines to Curb Cryptocurrency Risks” The guidelines, titled “The Administration’s Guidelines to Curb Cryptocurrency Risks,” were written by four White House advisors: NEC Director Brian Deese, Office of Science and Technology Policy (OSTP) Director Arati Prabhakar, Council of Economic Advisers (CEA) Chair Cecilia Rouse, and National Security Advisor Jake Sullivan.
According to the authors, the past year has been spent identifying the risks of cryptocurrencies and implementing measures to mitigate these risks through the Executive Branch’s authorities. The guidelines outline several risks, including cryptocurrency entities ignoring financial regulations, misleading consumers, conflicts of interest, inadequate disclosures, and committing fraud.
The authors also highlight the issue of poor cybersecurity across the industry, which has enabled North Korea to steal over a billion dollars to fund its missile program. The guidelines encourage regulators to continue increasing enforcement efforts and to issue new guidance as needed. The authors also reveal that the Administration will soon unveil priorities for digital asset research and development to help protect consumers by default.
Congress Urged to Increase Regulation of Crypto Sector The guidelines also call on Congress to step up its efforts in regulating the crypto sector. This includes expanding regulators’ powers to prevent misuse of customer assets and mitigate conflicts of interest, strengthening transparency and disclosure requirements for cryptocurrency firms, increasing penalties for violating illicit finance rules, and subjecting crypto intermediaries to bans against tipping off criminals.
However, the authors caution against allowing mainstream institutions to fully engage in cryptocurrency markets, as the limited exposure of traditional financial institutions to crypto has prevented turmoil in the crypto market from affecting the broader financial system.
In conclusion, the authors emphasize that the Administration supports responsible technological innovations that make financial services cheaper, faster, safer, and more accessible. However, new technologies must have commensurate safeguards in place, and the Administration will work with Congress to achieve these goals.