The request for comment is part of the agency’s mandate under President Biden’s March executive order to study cryptocurrency development.
In a version of the request-for-comment document on the Federal Register website, the Treasury said the crypto has been used in sophisticated cybercrime-related financial networks and activity, including ransomware. According to the document, the increasing use of digital assets has increased the risk of crimes such as money laundering, terrorist financing, fraud, theft and corruption.
Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson said in a statement Monday that public input will help the agency establish controls to hold bad actors accountable and identify potential gaps in existing enforcement.
Comments are expected from various stakeholders including crypto industry advocates, members of civil society, traditional financial institutions and crypto firms, according to Alex Zherdan, head of fintech and risk advisory firm Capital Peak Strategies LLC.
“This [commentary process] shows that the Treasury is taking public engagement very seriously … from the lens of risk, as opposed to risk and opportunity,” said Mr. Zerdan, a former Treasury official in the Obama and Trump administrations. He said it would ultimately depend on the Treasury. how it will incorporate the comments received in its policy-making process.
Taking public input into account, any potential rule-making from the Treasury could potentially face pushback from the crypto industry. The Treasury’s Financial Crimes Enforcement Network and the Federal Reserve Board proposed regulations in 2020 requiring financial institutions and crypto firms to collect and pass sender and receiver details on crypto transactions over $3,000. The plan received thousands of comments from the public, many of whom pushed against the proposed new rules. The controversial idea was put on hold in January 2021, in part after the Biden administration imposed a regulatory freeze, which is common for subsequent administrations. The rules remain in motion.
The request for comment comes as the crypto market sees another wave of volatility, adding to calls for more regulatory oversight. Bitcoin, the world’s largest cryptocurrency by market capitalization, was trading at $18,776 on the first Monday, down 4.8% from Sunday’s levels, before recently retracing above $19,000.
Businesshala previously reported that the Treasury Department is expected to spell out the risks it believes cryptocurrencies can present to consumers and the financial system in a series of reports that will go public this month.
The report, which the Treasury is completing and sending to the White House, will feature Treasury’s analysis of crypto markets, and will each focus on one of four topics—payment systems, consumer security, illicit finance and financial stability. —but it’s unlikely many provide specific policy prescriptions.
President Biden’s March executive order on digital assets that commissioned the report also asked other agencies to submit analysis.
The Biden administration last Friday released a comprehensive framework from various agencies concerning regulatory approaches to developing the digital currency ecosystem. The Justice Department also said it has tapped more than 150 federal prosecutors across the country to strengthen law enforcement efforts to tackle a rise in crime involving the use of cryptocurrencies such as bitcoin.
Mengqi Sun at [email protected]
Credit: www.Businesshala.com /