Biden administration officials have reportedly been looking into “loopholes” in cryptocurrency regulations in the wake of the latest market fluctuations and sending a signal that new rules may soon be proposed.
People familiar with the matter told the Washington Post that White House officials are looking at digital assets such as Bitcoin (BTC) that could be used to fund terrorist activities. They are also considering whether retail investors should be protected from price fluctuations in the digital asset markets.
The brief crash of Bitcoin below $ 30,000 last week triggered a sell-off wave as digital asset markets lost more than $ 1 trillion in just ten days. From mid-April to mid-May, the digital asset market has nearly halved.
A new U.S. Treasury Department proposal that would require holders of cryptocurrencies to report all transfers of more than $ 10,000 to the IRS was one of the many catalysts of the economic downturn. The Biden administration’s plan to double the IRS staff over the next decade has raised concerns among investors who believe the United States is rapidly losing competitiveness in the tax and digital asset markets.
For now, federal lawmakers do not believe that the sharp fluctuations in cryptocurrencies could threaten the stability of the financial market as a whole, according to The Washington Post, although this risk is worth watching. An anonymous source said, “They are aware of the fact that there are all kinds of abstract dangers and things to look out for, but they are still waiting and waiting.”
At its highest level, the cryptocurrency market as a whole was valued at more than $ 2.5 trillion, which is a low percentage compared to the broader economic system. However, as the cryptocurrency continues to grow, what the government considers an acceptable risk may change.