It is vital to enhance public awareness of risks, to reinforce regulatory results, and ensure a fair playing field while leveraging the advantages of innovation, the leaders of the G20 stated in a statement that was released on the website of the White House after the meeting that took place this week in Bali, Indonesia. Joe Biden, the vice president of the United States, was one of the signatories to the statement.
The amount of money that is believed that has been lost by FTX and its sister business Alameda Research has reached eye-popping heights, and it threatens to swallow the larger cryptocurrency industry. As a result, calls for tougher regulatory restrictions have swelled to a cacophony during the last week.
The leaders of the G20 nations have stated that they welcome the approach that has been proposed by the Financial Stability Board (FSB) for creating a comprehensive global framework for the regulation of virtual currency activities based on the principle of ‘same activity, same risk, same regulation.’
They have also stated that they want to ensure that the ecosystem surrounding crypto, which includes so-called stablecoins, is subject to stringent regulation, supervision, and oversight in order to mitigate any potential threats to investors.
Sam Bankman-Fried’s relationship with Joe Biden
A significant amount of money was donated by the defunct and insolvent cryptocurrency exchange FTX. Additionally, it had formed a partnership with Ukraine for the purpose of its cryptocurrency contribution program. When you add the fact that the Obama administration has been sending additional help to the nation in its conflict with Russia, you have the ingredients for the ideal right-wing conspiracy theory.
The downfall of the company has forced the White House of President Joe Biden as well as the heads of two prominent Democratic committees to openly denounce FTX and demand more monitoring of the sector as a whole. In light of the setback, President Biden has advocated for more restrictions around cryptography.
According to Biden’s line of thinking, it is more evident than ever before that there are significant repercussions associated with the operation of cryptocurrency firms in the absence of adequate government regulation and safeguards for users.
According to a committee official who requested anonymity to disclose private discussions, the chairwoman of the House Financial Services Committee, Democrat Maxine Waters of California, is contemplating starting a congressional investigation, and perhaps potentially bringing Bankman-Fried to the Hill to testify about the company’s near collapse in the coming weeks.
In January, there is a possibility that the Democrats may lose their majority in the House of Representatives depending on the results of several important contests that have not yet been declared.
What Biden’s crypto regulation aims to do
On March 9, President Biden issued an executive order (EO) titled “Ensuring Responsible Development of Digital Assets,” which described the first government-wide strategy for mitigating the dangers and capitalizing on the opportunities presented by digital assets and the underlying technologies.
For the last six months, federal agencies have collaborated to produce frameworks and policy proposals that promote the six primary goals listed in the EO: consumer and investor protection; supporting financial stability; combatting illicit financing; U.S. dominance “in the global financial system and economic competitiveness; financial inclusion; and responsible innovation”.
The U.S. head of state has called on the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to investigate and take legal action against illegal activity in the digital assets industry.
Consumers will be better prepared to deal with the dangers associated with digital assets, recognize typical fraudulent tactics, and know how to report wrongdoing thanks to public awareness initiatives spearheaded by the Financial Literacy Education Commission (FLEC).