US Treasury publishes laundry lists of crypto risks for consumers, national security

The Treasury Department was downbeat on crypto in two publications produced in response to the president’s executive order on digital asset development issued in March.

The United States Treasury Department released three publications related to digital assets Friday, in response to U.S. President Joe Biden’s Executive rder “Ensuring Responsible Development of Digital Assets.” One of them focuses specifically on crypto assets, and a shorter action plan looks at countering illicit finance risks. 

The discussion of crypto assets in “Crypto-Assets: Implications for Consumers, Investors, and Businesses” takes a cynical tone from the beginning, with the introductory paragraphs of the report stating:

“The potential for blockchain technology to transform the provision of financial services, as espoused by developers and proponents, has yet to materialize.”

About half of the report is a descriptive survey of crypto assets, after which the authors turn to the risks they pose to users. It divides risks into three categories, the first of which is conduct risks, that is, practices within the ecosystem. The report alleges that losses from cryptocurrency fraud skyrocketed in 2021 and are on course to overtake that record this year. It also identifies transparency issues of various kinds.

Operational risks, which include “deficiencies in information systems or internal processes, human errors, governance and management failures, or disruptions from external events” are given detailed consideration. Closely related but separately discussed are crypto-asset intermediation risks, which are the same risks investors face in traditional markets, such as volatility and custody issues, but form a “unique landscape” due to the nature of crypto.

Potentially the most valuable section of the report is a lengthy discussion of the opportunities and risks that crypto assets pose for vulnerable populations. This is especially so due to the extensive statistical information in the section.

The report makes three recommendations: vigilant monitoring, with increased enforcement, interagency cooperation and information sharing; that agencies produce more guidance and rules, and for greater educational outreach.

Related: Information, AML/CFT steps are key to fighting international digital crime, DOJ report says

The “Action Plan to Address Illicit Financing Risks of Digital Assets” approaches digital assets from the perspective of national security. It recommends seven priority actions that mainly encompass monitoring and enforcement efforts domestically and internationally.

It also recommends updating Bank Secrecy Act regulations and increased engagement with the private sector through “the publication of official documents, discussions, and Treasury programs that enable public‐private and private‐private information sharing.”

Related Posts

South Carolina treasurer goes on Bitcoin ‘fact-finding trip’ to El Salvador

The state official reportedly used his own funds to pay for the trip, which included discussing Bitcoin with government officials and exploring financial literacy programs. Curtis Loftis,…

Kardashian’s EthereumMax Lawsuit Turns Against SEC Chair

Earlier this week, the U.S. Securities and Exchange Commission (SEC) charged and settle a lawsuit with socialite and billionaire Kim Kardashian for allegedly withholding information about promoting…

US Job Openings Plummet- What Does It Mean for Bitcoin?

The number of new job openings in the US markets decreased by 6.2%. What is in store for the U.S. markets and Bitcoin? It is the 2nd…

Bitcoin Price at Generational Bottom With Institutions Buying en Masse

Crypto analyst Cred opines that bitcoin may have hit a generational bottom, presenting a good buying opportunity for long-term holders. On Oct. 5, 2022, Fidelity Investments purchased…

3 Easy Ways to 10x Your Bitcoin and Ether in October

Whether crypto is now on the path towards recovery or faces a wintery “Septembear”, you can still make a profit from your digital currency relatively easily. Here…

Big Eyes Coin and Axie Infinity – Which NFT-Based Cryptocurrency Has Greater Potential In The Market?

A brand-new NFT-based cryptocurrency called Big Eyes coin (BIG) will be released into the market, and if its pre-sale is any indication, it’s going to rock the…

Generated by Feedzy