The officials inside The Biden administration is investigating “loopholes” in crypto regulations following the recent episode of market volatility and sending out a signal that new rules may be proposed soon.
People familiar with the matter informed the Washington Post that White House officials are investigating whether digital assets such as Bitcoin (BTC) can be used to fund terrorist activities. They are also considering whether to protect retail investors from the extreme price volatility of the digital asset markets.
Bitcoin’s brief collapse last week below $ 30,000 sparked a wave of panic as digital asset markets lost more than $ 1 trillion in value in just ten days.. From end to end, the digital asset market nearly halved between mid-April and mid-May.
A recent proposal from the U.S. Treasury Department requiring cryptocurrency holders to report all transfers over $ 10,000 to the Internal Revenue Agency was one of the many catalysts behind the decline. The Biden administration’s plan to double the IRS workforce over the next decade has also raised concern among investors who believe the United States is rapidly losing competitiveness in tax and digital asset markets.
For now, Federal lawmakers do not believe that sudden changes in cryptocurrency prices could jeopardize the stability of the financial market in general.the Washington Post said, although the risks are worth monitoring. “They are aware of the fact that there are all sorts of risks and things to be aware of in the summary, but they are still largely wait and see,” the anonymous source said.
In its prime, the cryptocurrency market was valued at more than $ 2.5 trillion together, which is small compared to the wider financial system. However, As cryptocurrencies continue to grow, what the government sees as an acceptable risk may change.