The administration of U.S. President Joe Biden has released a framework to regulate cryptocurrencies.
The White House said the regulatory framework aims to both help the U.S. financial services industry evolve and to crack down on fraud in the cryptocurrency sector.
The framework, which comes weeks before midterm congressional elections in the U.S., follows an executive order issued by President Biden in March of this year that called on federal agencies to examine the risks and benefits of cryptocurrencies.
The White House’s proposed cryptocurrency regulations include a proposal to revise the Bank Secrecy Act, anti-tip-off statutes, and laws against unlicensed money transmitting involving digital asset exchanges and non-fungible token (NFT) platforms.
The White House is also looking into raising the penalties for unlicensed money transmitting, as well as amending federal statutes to allow the Department of Justice to prosecute digital asset crimes in any jurisdiction where a crime occurs.
The U.S. Treasury will now complete an illicit finance risk assessment on decentralized finance by the end of February next year (2023), as well as an assessment of non-fungible tokens by July 2023.
The move to regulate the cryptocurrency sector comes amid reports that more than $1 billion U.S. of digital assets have been lost to fraud since the start of 2021, according to the U.S. Federal Trade Commission.
Last month, the U.S. Securities and Exchange Commission (SEC) said it charged 11 people for their roles in creating and promoting a fraudulent cryptocurrency Ponzi scheme that raised more than $300 million U.S. from retail investors worldwide.
The proposed regulations also come as numerous cryptocurrency lenders and exchanges file for bankruptcy and halt redemptions by their customers.
The price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, is down 59% this year and currently trading at $19,800.00 U.S.
