Several bitcoin projects may face enforcement action in accordance with recently proposed regulatory standards.
In recent months, statements made by key Biden Administration figures, regulatory enforcement, and a series of studies have all clarified how the U.S. government intends to regulate cryptocurrencies. The Treasury Secretary, Janet Yellen, has been particularly vocal in calling for the regulation of digital assets, especially those tethered to the dollar. After the TerraUSD stablecoin was abandoned in May, Yellen and a number of Congressmen promised to establish a rigorous regulatory framework for stablecoins to protect American investors. A new stablecoin regulation law that was presented in draught form last week places a two-year embargo on “endogenously collateralized stablecoins” and may compel all non-bank stablecoin issuers to register with the Federal Reserve.
The Commodities and Futures Trading Commission and the Securities and Exchange Commission have recently stepped up their enforcement of cryptocurrency regulations. A cryptocurrency exchange called Coinbase was accused by the SEC of listing “at least nine” tokens that, in its view, should be classified as securities in July. After head Gary Gensler stated that he believed some U.S.-based cryptocurrency exchanges were trading against their own users in violation of the securities laws, the agency also declared that it is investigating all U.S.-based cryptocurrency exchanges. The CFTC, which is typically viewed as being more lenient on cryptocurrency regulation than the SEC, has alarmed cryptocurrency users as well since filing a first-of-its-kind lawsuit against the decentralised autonomous organisation Ooki DAO for allegedly running an illegal derivatives trading platform.
However, the majority of the information regarding prospective crypto enforcement was contained in the White House’s initial regulatory framework for cryptocurrencies, which was issued earlier this month. The strategy stated how several government agencies would collaborate to track the evolution of the digital asset market and focus on goals including expanding access to financial services and preventing financial crime.
With so much content being produced and shared, it is becoming increasingly difficult to comprehend how everything will fit into the present crypto landscape. Here, three cryptocurrencies are reviewed because they could be governed by recently released legislation.
Tornado Cash (TORN)
After the Treasury Department sanctioned Tornado Cash, the TORN token of the privacy protocol might be the cryptocurrency asset that attracts the most attention from regulators in the future.The Office of Foreign Assets Control at the Treasury sanctioned the protocol on August 8 because it “failed to deploy effective controls” to prevent cybercrime-related money laundering.
Tornado Cash does rid of the typical chain of traceability seen on open ledger blockchains by enabling users to deposit ETH or USDC to one Ethereum address and withdraw it to another. The protocol has gained appeal among hackers looking to launder their stolen digital assets in addition to being used by many crypto natives for lawful purposes, such as maintaining financial anonymity.
Through its regulatory framework for the sector, the Biden Administration has made it plain that it aims to combat all forms of crypto-related crime. According to the study, state-sponsored North Korean syndicates have been using digital assets. One example is Lazarus Group, which was in charge of several significant crypto breaches over the past year. With such a harsh response to criminal organisations, more enforcement will place a high priority on any protocol assisting in the laundering of their illegal gains.
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