WASHINGTON (AP) — Treasury Secretary Janet Yellen said more government regulation is needed to control the proliferation of cryptocurrency and ward off fraudulent or illicit transactions.
A potential benefit is that users would get documentation of their crypto transactions to use in filing their taxes.
“Taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for stock and bond transactions, so that they have the information they need to report their income to the IRS” , Yellen said in remarks Thursday at American University.
It was Yellen’s first speech on cryptocurrency since President Joe Biden signed an executive order on digital assets in March.
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The administration’s action follows several high-profile instances of alleged cryptocurrency laundering and fraud this year. In February, the Justice Department announced its largest financial seizure – over $3.6 billion – and the arrest of a couple accused of conspiring to launder billions of dollars in cryptocurrency stolen during of the 2016 hack of a virtual currency exchange.
In March, federal regulators charged two siblings with defrauding thousands of investors out of $124 million in unregistered securities offerings involving a digital token.
“We will make policy recommendations, including an assessment of potential regulatory actions and legislative changes,” Yellen said.
His speech centered on the importance of reducing the risks of digital currencies to the financial system, as well as maintaining the international importance of the US dollar.
“We have a vested interest in ensuring that innovation does not lead to fragmentation of international payment architectures,” she said, adding that over the next six months the Treasury will work with the White House and other agencies to develop digital reports and recommendations. currencies.
Biden’s cryptocurrency executive order urges the Federal Reserve to consider whether the central bank should create its own digital currency and directs federal agencies, including the Treasury Department, to study the impact of cryptocurrency on financial stability and national security.
As banks and other traditional financial firms become more involved in digital asset markets, Yellen said, regulation will need to “appropriately reflect the risks of these new activities.”
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The use of cryptocurrency and other digital assets has exploded in recent years. Surveys show that around 16% of American adults – or 40 million people – have invested in cryptocurrencies. And 43% of men aged 18-29 have invested their money in cryptocurrency.
The White House said in March that digital assets had reached a market capitalization of $3 trillion last November, up from $14 billion five years earlier.
“Our regulatory frameworks must be designed to support responsible innovation while managing risks, especially those that could disrupt the financial system and the economy,” Yellen said.
Lawmakers and administration officials have also expressed concern that Russia could use cryptocurrency to avoid the impact of the avalanche of sanctions imposed on banks, oligarchs and the energy industry in the country. recent weeks due to the invasion of Ukraine.
But treasury officials and cryptocurrency experts have said crypto isn’t a sanctions bust.
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Treasury Secretary Yellen Calls For Cryptocurrency Regulation To Reduce Risk And Fraud
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