Financial Regulators Urge Congress to Pass Crypto Legislation in New Report
Financial regulators in the United States have called on Congress to pass legislation to regulate cryptocurrencies in a new report released on Wednesday. The report, which was compiled by the Financial Stability Oversight Council (FSOC), the Financial Action Task Force (FATF), and various other government-appointed regulatory bodies, credited the novel asset class with providing a “wide range of potential benefits” for businesses and consumers.
The regulators acknowledged the global nature of cryptocurrency transactions and the need for consistent, comprehensive regulation across jurisdictions. The report highlighted the “unique” risk posed by crypto assets in terms of money laundering and other financial crimes, and urged the government to develop a “credible and appropriate regulatory framework.”
The report also identified “key risks” that need to be addressed, such as cybersecurity threats, volatility, market manipulation, investor protection problems, and the lack of clarity in how certain tokens should be classified. The report recommended that regulators should have sufficient access to data related to crypto asset transactions and that cryptocurrency trading and custodial services should be subject to anti-money laundering and consumer protection rules.
Overall, the report concluded that the government should “ensure that oversight of the [cryptocurrency] market is effective, comprehensive, and tailored to the scope and scale of the risks.” The authors of the report called on lawmakers to act quickly on the issue, citing the potential for rapid innovation in the cryptocurrency space.