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US Treasury Begins Public Consultation on How to Regulate Crypto

Source: AdobeStock / rrodrickbeiler

That US Treasury Department seeks public opinion on the “responsible development of digital assets”. His questions focus on a variety of crypto-related aspects, including decentralized finance (DeFi), non-fungible tokens (NFTs), mixers, virtual asset service providers (VASPs), and the digital dollar.

According to the Treasury Department document, “The Department is specifically seeking comments on the illicit financial and national security risks associated with digital assets and the publicly released plan of action to mitigate the risks.”

Open-ended questions that can be commented on include:

  • Has Treasury comprehensively defined the illicit funding risks associated with digital assets?
  • What are the illegal financial risks associated with non-fungible tokens?
  • What are the illicit financial risks associated with DeFi and peer-to-peer (P2P) payment technologies?
  • In your view, which existing regulatory obligations are not or no longer relevant in relation to digital assets?
  • What additional steps should the US government consider to combat ransomware?
  • What additional steps should the US government consider to address the illicit financial risks associated with blenders and other anonymity-enhancing technologies?
  • How can treasury most effectively support the consistent implementation of global Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) standards for digital assets, including virtual assets and VASPs, across jurisdictions?
  • Are there specific countries or jurisdictions where the US government should focus efforts through bilateral outreach and technical assistance to strengthen foreign AML/CFT regulations related to virtual asset service providers?
  • How can the Treasury most effectively support the incorporation of AML/CFT controls into a potential US CBDC design?

Comments can be submitted until November 3rd and will be part of the public record.

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However, many in the cryptoverse have long criticized the US government for focusing heavily on the illicit use of cryptoassets, while ignoring each of their potential benefits.

The head of politics at the Blockchain Association Jake Chervinsky argued that it was the Terra/LUNA collapse that severely damaged the government’s already poor perception of crypto.

Meanwhile, the Ministry of Finance has solicited comments from the public in accordance with the Executive Order dated March 9 this year “Ensuring Responsible Development of Digital Assets,” it said. The order aimed to create a framework of stricter and, some argued, more coherent regulations for the crypto sector.

The order said the government must “bolster United States leadership in the global financial system and in technological and economic competitiveness,” an action that includes “the responsible development of payments innovation and digital assets.”

It also called on a number of government agencies to report to the executive branch their proposals to regulate the sector and create customer protection protocols within 90 to 180 days.

Therefore, this request for comment is not the only action that followed the March 9 Implementing Order. As reported, in July this year, the Treasury Department presented President Joe Biden with a framework to facilitate international cooperation in introducing crypto regulations and standards at the international level.

The department said at the time:

“What is outlined in the framework is intended to ensure that when it comes to the development of digital assets, America’s core democratic values ​​are respected; Consumers, investors and businesses are protected; adequate connectivity of the global financial system and interoperability of platforms and architectures are maintained; and the safety and soundness of the global financial system and the international monetary system will be maintained.”

Then, just days ago, the Treasury Department submitted an action plan to the White House and released its report publicly. The coordinated plan of action was developed by the Secretary of the Treasury in consultation with the Secretary of State, the Attorney General, the Secretary of Commerce, the Secretary of Homeland Security, the Director of the Office of Administration and Budget, the Director of National Intelligence and the heads of other relevant agencies, the document said.

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As a result, the White House last week released a “first comprehensive framework for responsible development of digital assets,” outlining the conclusions and recommendations of various federal agencies following a six-month investigation into the crypto industry.

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Learn more:
– US Treasury Department Develops Framework for Pathway to International Crypto Regulations
– Joe Biden’s Executive Order on Crypto Calls for Consumer Protection, CBDC Consideration, Tech Innovation Support

– The crypto community is divided due to Biden’s crypto executive order
– Is the Biden Crypto Framework bullish or bearish on crypto prices?

– UK financial regulator warns about FTX crypto exchange
– US SEC establishes new office to handle crypto filings

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