Joe Biden administration is gearing up with new crypto regulations. There is a proposal for an executive order (EO) with new rules on the crypto assets.
Regulators on the Crypto Assets
Federal agencies aim to bring in regulations in the crypto sector. Both the Federal and state government are looking into the administration part of the crypto sector. Steps to bring down money laundering and illicit transactions will control the unregulated crypto market, state authorities.
The Securities and Exchange Commission (SEC), CFTC, and the IRS are some regulatory institutions in the US that bring changes in the crypto market.
The basic principle behind cryptocurrency is its unregulated and decentralized role in the crypto market. The US lawmakers are showing an extra interest in this unregulated sector. “We have no intentions to ban the cryptocurrency”. Instead, we hope to bring in new regulations on crypto assets, say authorities. It is a positive statement for the crypto market, which is under tight scrutiny in many countries.
Federal agencies have been working on regulatory guidance on the crypto market for many years. After a thorough study on the crypto sector, they will develop recommendations to bring in further regulations. Once regulations come in, it will boost investor confidence, say authorities.
Cryptocurrency Regulation to Prevent Fraudulent Activities
The US administration is looking into new regulations to fit into the existing rules in the crypto market. The Biden administration is looking into the crypto market to see how it works and take regulatory measures. There are no plans to bring a stringent ban on the crypto sector.
The intention to bring regulations is to prevent tax evasion and bring down crime. It will bring in tax reporting, which will prevent tax evasion. Authorities will take steps to exercise control over the crypto transactions, says SEC Chairman Gensler.
Exchanges will have to provide a record of all taxable events on their platform. By recording transactions, the value of the Bitcoin bought and sold is brought into account. It will prevent tax evasion and misuse of money. With proper accounting standards, crypto activities will become more regulated and organized, feel authorities.
The government plans to involve the Commerce Department to draft new regulations so that all crypto transactions are tax compliant, which will prevent money laundering. Banking regulators have implemented tax regulations through the futures markets and bank charters.
Criticism against the Cryptocurrencies
“Criminal activity has to come to an end in the crypto space”, says President Biden.
President Biden is not the only person to criticize cryptocurrency. Earlier, ex-president Donald Trump said that it “competes against the dollar”.
Federal Chairman Jerome Powell says that stablecoins play a significant role in the payment process, which requires an appropriate regulatory framework. The payment process requires adequate guidelines to monitor transactions, says Powell.
The most prominent institution against digital assets is the Financial Action Task Force (FATF). The CFTC calls cryptocurrencies a commodity, while it is a currency by the Treasury.
In Canada, the CSA Canadian Securities Administrators and the IIROC Investment Industry Regulatory Organization of Canada are regulating crypto trading.
In the UK, the FCA, Financial Conduct Authority, is a regulatory body of the crypto segment.
Germany was the first country to regulate the crypto sector. In China, there is a complete ban on crypto transactions. Stringent regulations against crypto assets are taking place in many countries. Each country has its own approach to regulate the asset class. There is no clear regulatory framework for the crypto sector so far.
Regulators are worried about the workings of the new asset class. There are no adequate regulations on the crypto market. Federal agencies will offer recommendations to study the new asset class regarding financial regulation and national security.
Executive Order by the US Administration
The executive order by the US authorities will target ransomware and criminal activities associated with digital assets.
Crypto regulatory compliance will bring in investor confidence in the crypto market. Regulatory compliance will help to bring down money laundering and financing of terrorism.
Illicit funds in the crypto markets have captured the attention of the public and the regulatory bodies across the globe. Each country is addressing issues connected in the crypto space with new regulations.
The court case against Ripple Labs by the SEC and the suit against Coinbase Global Inc. are some incidents that come under close scrutiny by the authorities.
Bitcoin Rally 30% in October
The Biden administration clarified that there will not be a total ban on the crypto sector in the US. Bitcoin rallied with the news, trading above $57,000 for the pasts two weeks. Other altcoins also saw a jump in prices.
Bitcoin is on a two-week rally, climbing to high levels last seen in May. A further upswing and Bitcoin will be at its all-time high of $65,000.
Ethereum is trading at $3,730, moving towards the September highs.
The top ten cryptocurrencies are trading higher. Bitcoin shot up to the monthly high at $58,000 levels on Thursday, Oct 14, 2021.
Dogecoin is trading at $0.2374, rising with a positive note along with other altcoins.