The Biden administration Friday published the “First-Ever Comprehensive Framework for Responsible Development of Digital Assets” in line with a March executive order obligating government agencies and sectoral regulators to conduct research on the effects of cryptocurrencies on consumer protection and the risks and benefits of deploying a Central Bank Digital Currency (CBDC).
The framework encourages sectoral regulators such as the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) to “aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.” The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) are also urged to “redouble” their monitoring of consumer complaints in the digital assets space.
The announcement proposes cooperation between the White House and Congress to amend federal laws. The White House will consider “urging Congress to raise the penalties for unlicensed money transmitting to match the penalties for similar crimes under other money-laundering statutes and to amend relevant federal statutes to let the Department of Justice prosecute digital asset crimes in any jurisdiction where a victim of those crimes is found.”
The US Department of the Treasury is now required to complete an illicit finance risk assessment on decentralized finance by the end of February 2023 and an assessment on non-fungible tokens by July 2023. The Treasury is empowered to lead a working group to “consider the potential implications of a U.S. CBDC, leverage cross-government technical expertise, and share information with partners.”
