The cryptocurrency industry, rather than democratizing financial services as its promoters have promised, so far has produced a minefield of frauds and thefts that federal regulators should redouble their efforts to police to protect the public, the Treasury Department said in a new report.
Treasury urges federal regulators to get tougher on crypto scams
The report — focused on crypto’s impact on consumers, investors and businesses — is one of three studies Treasury is releasing Friday in response to a sweeping review of the federal government’s approach to digital assets that President Biden ordered in March. The others focus on the threats crypto poses to combating illicit finance and what the technology could mean for streamlining payment systems, including through the launch of a U.S. digital dollar.
White House officials originally framed the effort as an attempt to ensure the U.S. harnesses the crypto’s potential while mitigating its risks. The implosion since then of several high-profile crypto projects deepened a rout in digital asset prices and wiped out hundreds of thousands of investors, as major hacks continue to plague the industry. The downturn has sharpened policymakers’ scrutiny of the sector that largely lacks federal oversight and underlined the need for a coordinated approach from Washington.
“Together, we are laying the groundwork for a thoughtful, comprehensive approach to mitigating digital assets’ acute risks and — where proven—harnessing their benefits,” National Economic Council Director Brian Deese and national security adviser Jake Sullivan said in a statement.
On the consumer front, the report suggests crypto presents an especially acute threat to lower-income people lured by the promise of quick riches. “While the data for populations vulnerable to disparate impacts remains limited, available evidence suggests that crypto-asset products may present heightened risks to these groups, and the potential financial inclusion benefits of crypto-assets largely have yet to materialize,” it said, noting people reported $1.6 billion in losses from scams and thefts to the FBI in 2021.
This is a developing story and will be updated.
Source: WP
