On Thursday, the White House said that further regulation of cryptocurrencies is necessary to protect Americans from potential damage.
Karine Jean-Pierre, the White House press secretary, stated during a news conference that the “Biden administration has long emphasized that, without effective control of cryptocurrencies, they risk hurting regular Americans.”
It’s something we’re keeping an eye on, and it’s something we consider to be significant,” she added. “The latest developments provide even more weight to these worries and show that cryptocurrency regulation is necessary,” the authors write.
Jean-Pierre meant this week’s failure of the cryptocurrency exchange FTX when he referred to “current news.” Analysts anticipate a further decline in cryptocurrency values as authorities investigate the company for possible securities breaches.
This week, FTX experienced the cryptocurrency equivalent of a bank run, prompting the exchange to agree to sell itself to larger competitor Binance. Customers left the platform as doubts about FTX’s financial stability grew.
Sam Bankman-Fried, CEO and creator of FTX, had been heralded as a savior earlier this year for his role in rescuing many bitcoin startups from financial ruin.
The crypto community and securities authorities are looking into Bankman-Fried and FTX on concerns that the company may have utilized user deposits to make investments in Bankman-hedge Fried’s fund, Alameda Research. Brokers in conventional markets are tasked with keeping customer money distinct from firm cash. When rules are broken, violators may face consequences.