US Treasury plans to ask public if crypto-related regulation is ‘no longer fit for purpose’

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The US Treasury Department will ask the public for comments on digital assets, including their views on how regulations can tackle the illicit use of crypto.

In a document to be published Tuesday in the Federal Register, the US Treasury Department requested public comment on “digital asset-related illicit financing and national security risks, as well as the publicly released action plan to mitigate the risks” regarding President Joe. Biden executive order on crypto as of March. The department invited the public to comment on legal obligations imposed by the US government that were “no longer fit for purpose in relation to digital assets”, and to suggest alternative regulations to mitigate illicit financial risks. and address vulnerabilities.

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“Illegal activities highlight the need for ongoing monitoring of the use of digital assets, the extent to which technological innovation can affect such activities, and exploring options to mitigate these risks through regulation, oversight, public-private involvement , surveillance and law enforcement,” the Treasury said.

In particular, the US Treasury Department asked for possible additional steps it could take related to addressing ransomware attacks, illicit financial risks from cryptocurrency mixers and DeFi, and how the government is pursuing money laundering and anti-money laundering policies. counter terrorist financing at the state and federal levels. The public has until November 3 to submit comments.

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The request for public comment followed the White House releasing a regulatory framework for digital assets on Sept. 16. Many in the space, including crypto advocacy groups, criticized the administration for seemingly focusing on the illicit use of crypto rather than its potential benefits. As part of the framework’s requirements, the Treasury Department will create an “illegal financial risk assessment of decentralized finance” by February 2023.

Related: Illegal crypto use as a percentage of total use has fallen: Report

Biden’s executive order also caused the Treasury Department and the Federal Reserve to examine policy goals and a US central bank digital currency, or CBDC. On September 17, the Office of Science and Technology Policy released a report on 18 different design choices for the possible implementation of a digital dollar in the United States.

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