Biden Admin Plans to Regulate Cryptocurrency and Digital Assets

MARY CHASTAIN

SEP 21, 2022 11:00 AM

President Joe Biden’s administration wants to regulate digital assets like cryptocurrencies by cracking down on crime because of its “potential for misuse and harm.”

We all knew the federal government would go after cryptocurrency. Fear arises, and they prey on it.

The White House used the “crash of a so-called stablecoin” in May that “wiped out over $600 billion of investor and consumer funds” to force themselves onto us.

Biden issued an EO in March to develop frameworks “addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

The nine reports given to the White House claim something needs to be done since these “assets pose meaningful risks for consumers, investors, and businesses.”

Our betters will take care of us, you guys. They know what is best for us. The use of crypto has increased, and there have been many stories about fraud and scams. Please, before you get involved in anything financial, crypto or not, think twice. If it sounds too good to be true, then it is.

The administration wants to make it sound like it’s all about protection, but overreach is at the heart of the plans.

It’s not about protecting the citizens. It’s all about regulation and dipping their hands in the honey pot.

What a shock. The statement from the White House buries the lede: Exploring a U.S. Central Bank Digital Currency (CBDC). A CBDC is “a digital liability of a central bank that is widely available to the general public.” Of course, the Federal Reserve would be in charge of CBDC distribution. They’ve done so well with paper money, after all. (Money machine go bbbbbbbrrrrrr)

The White House “encourages” the Fed to continue researching CBDC (their emphasis):

The Administration encourages the Federal Reserve to continue its ongoing CBDC research, experimentation, and evaluation. To support the Federal Reserve’s efforts and to advance other work on a potential U.S. CBDC, the Treasury will lead an interagency working group to consider the potential implications of a U.S. CBDC, leverage cross-government technical expertise, and share information with partners. The leadership of the Federal Reserve, the National Economic Council, the National Security Council, the Office of Science and Technology Policy, and the Treasury Department will meet regularly to discuss the working group’s progress and share updates on and share updates on CDBC and other payments innovations.

However, Republican senators have already taken steps to ban the Federal Reserve from handing out CBDC to individuals:

Failure to do so might empower an entity like the Fed to “mobilize itself into a retail bank,” allowing the agency to collect personal information of users and track their transactions. The U.S. Fed “does not” and “should not” have the authority to offer retail bank accounts, they warned.Unlike cryptos like Bitcoin, CBDCs are issued and backed by the government. Transactions are conducted on a “centralized, permissioned blockchain.” This model will allow for the centralization of financial information of U.S. citizens. Not only can it pave the way for direct financial surveillance of American citizens, but the personal info will also be vulnerable to attack from third parties.The bill will make sure that Congress “stands in the way” of government officials “snooping” on the financial activities of “hardworking Americans,” Grassley stated.

Our lovely Treasury Secretary Janet Yellen praised “innovation” but oh my goodness, it is dangerous, too:

“Innovation is one of the hallmarks of a vibrant financial system and economy. But as we have learned painfully from the past, innovation without appropriately addressing the impact of these developments can result in significant disruptions and harm to the financial system and individuals, especially our more vulnerable populations. The reports clearly identify the real challenges and risks of digital assets used for financial services. At the same time, if these risks are mitigated, digital assets and other emerging technologies could offer significant opportunities. These reports and their recommendations provide a strong foundation for policymakers as we work to realize the potential benefits of digital assets and to mitigate and minimize the risks.”

That means Yellen will explore a digital currency:

Treasury Secretary Janet Yellen said one Treasury recommendation is that the U.S. “advance policy and technical work on a potential central bank digital currency, or CBDC, so that the United States is prepared if CBDC is determined to be in the national interest.”“Right now, some aspects of our current payment system are too slow or too expensive,” Yellen said on a Thursday call with reporters laying out some of the findings of the reports.

The White House included a few other buried ledes of things they’re considering to do in the future:

The President will also consider agency recommendations to create a federal framework to regulate nonbank payment providers.

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The President will evaluate whether to call upon Congress to amend the Bank Secrecy Act (BSA), anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers—including digital asset exchanges and nonfungible token (NFT) platforms. He will also consider urging Congress to raise the penalties for unlicensed money transmitting to match the penalties for similar crimes under other money-laundering statutes and to amend relevant federal statutes to let the Department of Justice prosecute digital asset crimes in any jurisdiction where a victim of those crimes is found.

The “framework for responsible development of digital assets” dives deeper into the involvement of the Department of Justice and the Treasury Department.

The administration wants to take these steps:

The reports encourage regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), consistent with their mandates, to aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.
The reports encourage Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC), as appropriate, to redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive, or abusive practices.
The reports encourage agencies to issue guidance and rules to address current and emergent risks in the digital asset ecosystem. Regulatory and law enforcement agencies are also urged to collaborate to address acute digital assets risks facing consumers, investors, and businesses. In addition, agencies are encouraged to share data on consumer complaints regarding digital assets—ensuring each agency’s activities are maximally effective.
The Financial Literacy Education Commission (FLEC) will lead public-awareness efforts to help consumers understand the risks involved with digital assets, identify common fraudulent practices, and learn how to report misconduct.

The DOJ launched the Digital Asset Coordinators (DAC) Network, which includes “150 designated federal prosecutors from U.S. Attorneys’ Offices.” Eun Young Choi will direct the DAC.

Attorney General Merrick Garland invoked national security because of course he did:

“As digital assets play a growing role in our global financial system, we must work in tandem with departments and agencies across government to prevent and disrupt the exploitation of these technologies to facilitate crime and undermine our national security,” said Attorney General Merrick B. Garland. “The efforts announced today reflect the commitment of the Justice Department and our law enforcement and regulatory partners to advancing the responsible development of digital assets, protecting the public from criminal actors in this ecosystem, and meeting the unique challenges these technologies pose.”