Looming cryptocurrency regulations are getting the top down approach.
As in, really top down. From the desk of the president.
Bloomberg reported at the end of the week that a range of possibilities tied to regulating cryptocurrencies is being mulled at the White House – with a focus on combatting ransomware and cybercrime.
The options include, reportedly, an executive order. Just what that order may look like, and what it will dictate remain to be seen. But the fact is that a mandate from President Biden, along with continuing multi-agency efforts focused on security, speaks to the urgency of making cryptos safer.
“The NSC and NEC are coordinating across the interagency to look at ways we can ensure that cryptocurrency and other digital assets are not used to prop up bad actors, including ransomware criminals,” the White House National Security Council spokeswoman said, as quoted by Bloomberg, with a nod toward the National Security Council and the National Economic Council.
And as noted in this space last week, the U.S. Department of Justice (DOJ) announced the formation of the National Cryptocurrency Enforcement Team (NCET). The NCET, according to the announcement, will tackle its own cases, and will assist other agencies in tackling crypto-related crimes.
“Team members will combine their expertise in financial systems, blockchain technology, tracing transactions and applicable criminal statutes to address illegal activity involving cryptocurrency in a structured way,” the DOJ said.
Read Also: DOJ Introduces National Cryptocurrency Enforcement Team
A presidential executive order, if one is forthcoming, might represent an even more sweeping effort. Those orders, generally speaking, are meant to marshal federal agencies and to direct them in certain tasks. But it should be noted, too, that these orders get things done without going through Congress.
It’s already been well-reported that there won’t be outright bans on cryptocurrencies here in the states.
Read Here: No Plans to Ban Crypto in US – But Digital Dollar May Eventually Win Out
But crypto-related scams have become the “flavor of the year,” as Peter Diskin, assistant regional director at the U.S. Securities and Exchange Commission’s Atlanta, office said over the summer.
“We see this all the time — that whatever is a popular topic becomes a way for fraudsters to get people’s attention,” Diskin said at on online forum. “They say this is something new and profitable,” while playing on people’s fear of missing out on the next big thing.
Crypto-related fraud complaints have risen sharply into 2021, according to the Federal Trade Commission.
Scams on the Rise
More than 7,000 people reported scams involving digital assets between last October and May, with a median loss of $1,900. That’s 12 times as many complaints as the previous year.
Read More: Crypto Scams Now Favored Crime Tool
The urgency to get some regulatory clarity in place is there. Last week that, across the Pond, regulators in England said they will look to embrace Basel frameworks to help banks navigate their exposure to cryptos. Those (eventual) frameworks would touch, among other things, on Group 2 cryptoassets. Bitcoin is cited as an example of a Group 2 cryptoasset.
Read Also: Push Toward Crypto Framework May Buck Bankers’ Reservations
Later this month there will be a convening of 30 countries here in the States, in a confab designed to address cyberthreats and crypto. There may not be a detailed roadmap that emerges from that meeting. But it’s a sign of the continued scrutiny that bitcoin and other coins will garner in the months ahead as new rules and new policy take shape.
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