Four U.S. senators under the Biden administration have called on Congress to hasten its efforts to regulate the crypto industry adequately.
They made the call in a blog post published on Friday, urging Congress to restore transparency to the embattled crypto space. The United States is reportedly the country with the highest level of DeFi adoption.
In a long list, the four senators—Brian Deese, director of the National Economic Council; Arati Prabhakar, director of the White House Office of Science and Technology Policy; Cecilia Rouse, chair of the Council of Economic Advisors; and National Security Advisor Jake Sullivan—identified the possible risks in the crypto space and how to curb them.
White House Urges Congress to Enhance Customer Protection
The effect of bad actors was visible in the crypto industry last year, as it suffered numerous setbacks regarding poor investor fund management. The FTX and Terra fallout heavily impacted the crypto industry the previous year.
The senators urged Congress to expand the powers of federal regulatory agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). According to the senators, this move will strengthen transparency and prevent the misuse of customers’ assets.
The U.S. legislators were encouraged to provide more support to law enforcement. To do so, it has to strengthen the penalties for violating financial rules and fund law enforcement capabilities.
Senatorial advisers also urged Congress to enhance disclosure requirements for crypto companies so investors can make more informed financial and environmental risk assessments. The officials advocated limiting other financial institutions’ exposure to cryptocurrency risks and regulating stablecoins to ensure financial stability.
Senators Grumble at New Congress Move
The senators expressed dissatisfaction with a recent move to loosen cryptocurrency regulation, citing that it will “worsen risks to investors and the financial system.” They warned against Congress giving the green light to mainstream institutions to dive fully into the cryptocurrency market.
They noted that the recent market fallout had minimal impact on the county’s financial stability due to the minimal exposure of mainstream institutions. This narrative, however, will change if the ties between them broaden.
“It would be a grave enact legislation that reverses course and deepens the ties between cryptocurrency and the broader financial system,” the officials said.
The officials commended the technological initiatives of digital assets and pointed out that safeguarding is vital to ensure that the innovations benefit all. They reiterated the Biden administration’s enthusiasm to work with Congress to drive the digital asset framework forward.
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