White House ‘aware of’ stressed crypto friendly bank Silvergate, says press secretary Karine Jean-Pierre

On March 6, White Home Press Secretary Karine Jean-Pierre was pressed on whether or not the President was monitoring the evolving state of affairs across the harassed crypto-friendly financial institution Silvergate.

“We gained’t touch upon Silvergate particularly, however it’s clearly solely the newest firm within the cryptocurrency area to expertise important points,” the press secretary mentioned.

“In latest weeks, banking regulators have launched tips on how banks ought to defend themselves from dangers related to crypto. As you already know, it is a president that has repeatedly referred to as on Congress to take motion to guard on a regular basis People from the chance posted by digital property.”

“And he’ll proceed to take action. So gained’t converse to this specific firm as we now have not on different cryptocurrency firms. However we’re going to proceed monitoring the studies and clearly we’re conscious of the state of affairs.”

FTX’s Collapse Results in Silvergate’s Asset Liquidation

In November of final 12 months, FTX, a preferred cryptocurrency trade, collapsed, leaving excellent money owed of billions to its collectors. A kind of collectors was Silvergate, a financial institution that offered companies to FTX. On account of FTX’s collapse and the next withdrawal of buyer deposits, Silvergate was compelled to liquidate property valued at $5.2 billion at first of 2023.

White Home’s Stance on Cryptocurrency and Monetary Regulation

The White Home has been intently monitoring the cryptocurrency business and its influence on the monetary markets. In latest months, there have been requires elevated regulation of cryptocurrencies to stop occasions just like the collapse of FTX and the ensuing fallout for firms like Silvergate.

President Biden’s administration has proposed new rules that might require cryptocurrency exchanges to report transactions over $10,000 to the Inside Income Service (IRS) and impose stricter Know Your Buyer (KYC) necessities to stop cash laundering and different unlawful actions.

The proposed rules have been met with each assist and opposition from the cryptocurrency neighborhood. Whereas some consider elevated regulation is critical to guard customers and stop fraud, others argue that it might stifle innovation and hurt the expansion of the business.

In September 2022, the White Home released the framework for cryptocurrency regulation primarily based on the sooner government order from President Biden.

The manager order highlights apprehensions concerning digital property from the Biden administration and their interdependence with the traditional monetary market, probably inflicting financial instability by contagion results.

In line with the framework:

“The President will consider whether or not to name upon Congress to amend the Financial institution Secrecy Act, anti-tip-off statutes, and legal guidelines in opposition to unlicensed cash transmitting to use explicitly to digital asset service suppliers — together with digital asset exchanges and nonfungible token (NFT) platforms.”

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