Caitlin Long, founder and CEO of U.S. crypto bank Avanti Financial, said the “U.S. crypto regulatory crackdown” has begun, but stressed that it is not a “bitcoin ban.
She expressed her optimism that the upcoming regulations will bring crypto laws in line with standard financial rules regarding taxation and compliance.
It’s clear that the U.S. is starting a regulatory crackdown on cryptocurrencies, but I’m optimistic because most of the major players/institutions have already taken the position that policy is forming: it’s “pay taxes, follow the law, don’t take shortcuts, and we’ll be able to drive innovation.” This is not a “bitcoin ban”.
- Caitlin Long (@CaitlinLong_) May 20, 2021
The issue of regulation has come back into focus in recent weeks as the brutal crypto market crash has Washington struggling to find a response.
The Avanti CEO provided nine news events, public statements and announcements from May 5 to May 21 involving the IRS, the Office of the Comptroller of the Currency, the Financial Crimes Enforcement Network and the Secretary of the Treasury, among others, to conclude that the new regulations include a “compliance crackdown.
“This regulation f may not be over yet, but the pattern is quite clear: it’s a compliance crackdown for sure, but the path to ‘responsible innovation’ in the U.S. appears to be continuing.”
Long highlighted a May 20 U.S. Treasury Department report that called on exchanges and custodians to report information on cryptocurrency transactions over $10,000.
This report stated, “Collecting this type of information is a proven way to improve compliance, rather than introducing new requirements for taxpayers.”
Long also noted that the Federal Reserve also took aim at the stablecoin industry, according to a statement released yesterday by Fed Chairman Jerome Powell (Jerome Powell).
He said, “As the use of stablecoins increases, we must also focus on an appropriate regulatory and supervisory framework.” Then he said.
“This includes a focus on private sector payments innovators who are currently outside of the traditional regulatory arrangements that apply to banks, investment firms and other financial intermediaries.”
Long described the statement as a “warning,” saying its “consistent theme is to comply with the law and not to take shortcuts (i.e., to be fully regulated as a bank and pay the full cost of regulation).”
Powell also revealed in the statement that the Fed is moving forward with plans to study how to implement a U.S. central bank digital currency (CBDC). The Fed chairman noted that “the focus is on whether and how CBDC can improve the already safe, effective, vibrant and efficient U.S. domestic payments system.”
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