Four senior White House officials on Friday called on the Congress to expand regulators’ powers to prevent cryptocurrency misuse and mitigate conflicts of interest.
Traditional financial entities have limited exposure to cryptos, which likely shielded them from the recent downturn. The officials in a statement said enacting legislation that deepens ties between cryptos and the broader financial system “would be a grave mistake”.
The joint statement was from Brian Deese, director of the National Economic Council; Arati Prabhakar, director of the White House Office of Science and Technology Policy and Science Advisor to the President; Cecilia Rouse, chair of the Council of Economic Advisers; and Jake Sullivan, national security advisor.
The officials suggested that Congress strengthen disclosure requirements and penalties, and subject crypto intermediaries to bans against tipping off criminals. It could also back more law enforcement capacity, including internationally.
“Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into crypto markets,” they cautioned.
The officials highlighted that the Biden administration supports “responsible technological innovations that make financial services cheaper, faster, safer, and more accessible”.
U.S. legislators and regulators have been ramping up scrutiny of the crypto industry in the wake of a string of bankruptcies as well as allegations of scams and price manipulation.
Most recently, the SEC charged Avraham Eisenberg with price manipulation of the MNGO token, while the DoJ charged Bitzlato founder Anatoly Legkodymov with money laundering and ransomware.