Biden’s Communications Director Restricted From Handling Crypto Firms

US President Joe Biden’s communications director, Ben LaBolt, will reportedly be restricted from handling matters related to any cryptocurrency or technology firms he previously represented, according to an April 22 Bloomberg Law report. However, he will be allowed to advise on the president’s approach to regulating cryptocurrency and social media companies.

LaBolt was previously a partner at Bully Pulpit Interactive (BPI), a communications firm that had 23 clients paying fees exceeding $5,000 in a year. These clients included decentralized exchange UniSwap, venture capital firm Andressen Horowitz, and companies such as Meta Platforms, Shopify, and West Street.

In a public financial disclosure report published on April 21, LaBolt disclosed owning $50,001-$100,000 in Bitcoin and $15,001-$50,000 in Ethereum 2. However, he will be barred from “participating in legal matters, investigations, or contracts involving cryptocurrency or technology firms he previously represented.”

These restrictions are in line with the ethics rules followed by senior White House staff. Despite the restrictions, LaBolt will be allowed to advise on crypto regulation.

This move comes after Biden signed an executive order (EO) on digital assets on March 9. The EO outlined an interagency process that will involve 16 high officials, initially starting with the task of producing an elaborate series of reports. These reports are due at intervals ranging from 90 days to over a year from the publication of the EO.

While the EO did not specify any regulatory actions, it attracted attention from government officials and industry leaders alike. Republican “Crypto Senator” Cynthia Loomis of Wyoming praised the administration’s growing interest in digital assets.

Ari Redborn, head of legal and government affairs for blockchain-based intelligence firm TRM Labs, said that he was “expecting certain things and the positive tone was not necessarily one of them.”

The move to restrict LaBolt’s handling of matters related to crypto firms may be seen as a way to ensure ethical behavior in the White House. This move is in line with the Biden administration’s focus on transparency and ethical governance.

It is worth noting that this move may also affect LaBolt’s former clients, such as UniSwap and Andressen Horowitz. It remains to be seen how this move will affect their business dealings with the White House.

Overall, this move highlights the growing interest in crypto regulation by the Biden administration. With the interagency process set in motion by the EO, it is likely that the US government will take a more active role in regulating the crypto industry.


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White House Report Casts Doubt on Cryptocurrencies

The White House’s recently released Economic Report of the President includes a chapter questioning the benefits of cryptocurrencies. This is the first time the White House has included a section on digital assets since it began issuing the annual economic policy report in 1950. The report includes 35 pages dedicated to debunking the “Perceived Appeal of Crypto Assets,” along with a short section on the FedNow payment system and central bank digital currencies.

The report argues that crypto assets fail to deliver on their touted benefits, such as improving payment systems, financial inclusion, and creating mechanisms to transfer value and intellectual property. It also argues that cryptocurrencies fail to perform the functions of sovereign money, as their prices fluctuate too wildly to be a stable store of value, nor can they function as a unit of account or medium of exchange. Stablecoins are also criticized, as they are subject to run risks and are therefore too risky to satisfy their role as a “fast payment” instrument.

Crypto executives have expressed frustration over the report, with the co-founder of digital asset investment firm Paradigm, Fred Ehrsam, remarking that 15% of the Economic Report was dedicated to “crypto FUD.” Kristin Smith, CEO of the Blockchain Association, called the report “disappointing,” stating that it shows some in the government appear “increasingly allergic” to the burgeoning crypto industry.

The report also takes aim at decentralization, arguing that blockchain-based applications are in practice neither decentralized nor trustless. Users access crypto assets by going to a limited set of crypto asset platforms, while a small group of miners performs the majority of mining in most crypto assets, it argues.

The latest annual economic policy report was published shortly after the collapses of Silvergate, Silicon Valley, and Signature banks, all of which had served aspects of the crypto industry. Dan Reecer, chief growth officer at decentralized finance platform Acala Network, claims that the report comes “just days” after Operation Chokepoint 2.0 was executed on crypto-friendly banks. He also noted an “obvious early warning” of an upcoming United States central bank digital currency, referencing a section of the report that seemingly touts the benefits of a U.S. central bank-controlled currency.

Despite the criticism, it is worth noting that the report is not a policy statement, and it remains to be seen how the Biden administration will approach the regulation of cryptocurrencies and digital assets in the coming months.


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U.S. President Joe Biden’s administration released a statement on Jan 27

On January 27, the White House published a statement in which it presented the administration of United States President Joe Biden with a road plan for addressing the risks associated with cryptocurrencies. The road plan was supplied by the White House. The White House is responsible for releasing the statement. A sizeable amount of the information that was sent to the Congress of the United States of America was handled by the legislative help that was offered by the administration.

The authors of the declaration proposed a plan for advancing that was divided into two components in order to accomplish their goal. They wrote: “We have spent the last year examining the risks associated with cryptocurrencies and working to minimise those risks by making use of the power that the Executive Branch has.” This pertains to the last year and a year’s worth of months.

In September of 2022, the government will release what will be known as the “first-ever” comprehensive framework for the creation of digital assets. This component of the road plan will be the first one to be implemented. The reports that were needed by the presidential executive order that was announced in March 2022 and was named “Ensuring Responsible Development of Digital Assets” were used to produce this document, which was then posted for public consumption.

Second, executive agencies are increasing the amount of work they put into enforcement and are publishing revised rules. “to help customers in better appreciating the dangers involved with acquiring cryptocurrencies,” the statement states that government organisations are in the midst of establishing public awareness programmes. It focused primarily on bank regulators and asked them to keep up their level of action since they were the target of the attention. The announcement was issued on the same day that the Federal Reserve made the decision to reject the application of the digital asset Custodia Bank to join the Federal Reserve System.


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White House Asks Regulators to Enforce Crypto Rules Citing FTX Crises

Regulators all over the world have cowered due to the FTX collapse which has caused a further plunge in the digital asset market.


Therefore, there is a call for stricter regulations for cryptocurrencies and their industry. Presently, the Biden administration is reemphasizing its call for more regulations and legislation around digital assets in the United States.

According to White House Press Secretary Karine Jean-Pierre, the Biden administration has never failed to remind its citizens of the impending risk and uncertainty associated with trading cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and others due to their volatility and exposure to cyber crimes. Using FTX implosion as a yardstick, Jean-Pierre reiterated the need for core crypto regulations.

“The administration has consistently maintained that without proper oversight cryptocurrencies risk harming everyday Americans,” Jean-Pierre said during a White House press briefing which was held on Thursday “This is something that clearly we monitor and that we see as an important issue. The most recent news further underscores these concerns and highlights why prudent regulation of cryptocurrencies is indeed needed.”

As such, the White House is keeping an eye on the Bahamian crypto exchange situation.

Joe Biden Signs Executive Order For Crypto Regulation 

In March, President Joe Biden signed an executive order which served as further regulation of the crypto industry especially, as it concerns digital asset trading in America. Although at that time, the country was seeking means to ensure that war-ladened Russia did not evade sanctions through the use of digital currencies. Now, the executive order holds a broader perspective for the crypto industry. 

A few core areas that were referred to in the executive order are the use of crypto for terrorism financing, cyber attacks, and scams and the effects on the American financial economy. The executive order was a drive for the appropriate government agencies to work with other foreign entities to create policies and regulate the crypto ecosystem. 

Binance bail out from FTX acquisition after receiving the result of corporate due diligence has turned out to be an earthquake for the former crypto ecosystem ‘saviour’. More so, FTX Chief Executive Officer (CEO) Sam Bankman-Fried was an active voice that represented the nascent crypto industry at Capitol Hill while always speaking of his vision for the regulation of crypto.

Image source: Shutterstock


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The White House Publishes Guidelines for Regulating Digital Assets

The U.S President, Joe Biden has set up a new framework on how cryptocurrency will be traded and regulated in the U.S.


The framework focuses on how cryptocurrency can be improved to perform a seamless transaction and also reduce crime that can occur from the use of digital assets amongst investors and the crypto space in general.

According to reports, the president is debating whether to urge Congress to raise the penalties for sending unreported money as well as whether to amend some federal laws to allow the Department of Justice to investigate crimes involving digital assets wherever a victim of such crimes is found.

This new framework follows an Executive Order that was issued in March by President Biden; Federal agencies were asked to give a detailed report after examining the Pros and Cons of using cryptocurrencies for performing financial transactions.

The U.S government is aiming to be at the forefront in bringing democratic values and global relevance of digital assets, therefore 6 major priorities have been proposed in the national policy: protection of American businesses and investors; global financial stability; mitigating the illegal use of digital assets; promotion of U.S leadership and global competitiveness; enhance access to affordable financial institutions, and ensure responsible use of digital assets.

The Proposed Digital Dollar

According to a report from International Monetary Fund (IMF) in July, there are about 100 CBDC in various stages of study and development across the world with two fully operational: the eNaira in Nigeria and the Bahamian sand dollar.

The United States government has also demanded research to be made on the use and development of the Central Bank Digital Currency (CBDC) as a means of transitioning into the use of digital currencies. 

CBDC is a token similar to cryptocurrency and issued by the Central Bank. The CBDC will be pegged with the same value as the U.S dollar and considered a means of making payments for goods and services in the country.

The possible benefits of using the U.S CBDC include financial inclusion, improvement of international payments, providing access to safe central bank money, boosting the U.S dollar internationally, and protection against criminal activities.

Image source: Shutterstock


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White House Suggests Banning Proof-Of-Work Crypto

The White House Office of Science and Technology released a report on Thursday urging the Environmental Protection Agency (EPA) and the Department of Energy (DOE) to take measurable actions to control high energy consumption by crypto mining proof-of-work mechanism.

The report is among the first responses to US President Joe Biden’s executive order on cryptocurrencies.

The document acknowledges that cryptocurrency technologies use a high amount of electricity that contributes to greenhouse gas emissions, additional pollution, noise and other local impacts.

The first section of the report, which serves as an introduction, hints toward banning proof-of-work cryptocurrency mining operations if regulatory action fails to enable the country to achieve its climate goals.

“Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report said.

The next part of the document explores the impact of crypto mining on national electrical grids. The White House’s Science and Technology team claims that Bitcoin mining, powered by a proof-of-work consensus mechanism, adds stress on the power grid that results in cases of blackouts, fire hazards, and equipment deterioration. According to the report, Bitcoin mining has raised the average electricity cost for local consumers.

“Depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals,” the report elaborated.

The final section of the report suggested ways in which Bitcoin mining can benefit efforts toward achieving U.S. climate goals. The report advocated for the responsible development of digital assets and solutions to drastically reduce crypto energy consumption.

The report recommended the use of the “less energy-intensive consensus mechanism, called Proof of Stake (PoS), which is considered to consume less than 0.001% of global electricity usage.

The White House also encouraged crypto miners to consider using electricity generated from vented and flared methane at oil and gas wells and landfills as another viable alternative. 

Why Is the White House Taking an Interest?

In March, U.S. President Biden signed an executive order, calling on the government to examine the risks and benefits of crypto assets.

The measures focused on six key areas like consumer protection, financial inclusion, financial stability, U.S. competitiveness, illicit activity, and responsible innovation.

The executive order was a kind of a ‘call to action’ that laid out a series of policy statements, such as the need to protect consumers, investors, and businesses in the US, as well as the need to support technological advances that promote responsible development and use of digital assets.

The executive order expected a set of reports coordinated through the interagency process from a broad range of executive branch stakeholders.

Image source: Shutterstock


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White House Expects to Raise over $10b in Revenue under New Crypto Tax Rules

On Monday, The Biden Administration released its budget plan for the fiscal year of 2023. The budget proposal, which totals $5.8 trillion with a $1.15 trillion deficit, features some hints on the administration’s long-term plans for cryptocurrency.

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The budget plan proposes modernizing rules for digital assets through expanding tax reporting requirements. The expansion of the crypto tax rules would enable the White House to bring in over $10 billion in new revenue over the next decade. The proposed federal budget expects about $5 billion in additional revenue in 2023 alone.

The projected tax revenue is based on proposals to revise rules related to digital assets. The bulk of the additional revenue would come from a proposal seeking to extend “mark-to-market” rules to more digital assets. This could mean that cryptocurrencies that appreciate prices might be taxed regardless of whether they make sales or not.

The plan is part of the Biden administration’s effort to reduce the national deficit by more than $1 trillion over the next decade.

The Biden budget also seeks an additional $52 million in funding for the Department of Justice to hire more agents and acquire analytical capabilities as part of the administration’s commitment to counter cyber threats, including boosting programs to combat the misuse of crypto coins.

Major Step for Crypto Use

Earlier this month, President Biden issued an executive order that confirmed the importance of cryptocurrencies while stressing the need to protect the financial system as well as consumers and investors.

The executive order is a call to action rather than a specific game plan. It highlights a series of non-controversial policy statements, such as the need to protect US consumers, investors, and businesses and support technological advances that promote responsible use and development of digital assets.

The administration seeks to strike the right balance between the positives of cryptocurrency —financial inclusion, efficiency, American leadership in global finance— and its negatives: regulatory arbitrage, potential business and consumer abuse, and illicit financing.

Image source: Shutterstock


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US President Joe Biden to Sign Executive Order on Crypto this Week

According to several people familiar with the White House’s deliberations, U.S. President Joe Biden is expected to issue an executive order on cryptocurrency this week. The move will mark the first step toward regulating how crypto assets are traded. - 2022-03-09T170318.531.jpg

The action by the White House comes as, in recent weeks, U.S. administration officials have raised concerns about Russia’s use of crypto assets to evade the impact of sanctions in response to its invasion of Ukraine. The sanctions have closed the country’s stock market and sent the ruble to historic lows.

Two people familiar with the process have disclosed that the executive order on cryptocurrency is expected to be issued this week. The order will describe what government agencies, including the Treasury Department, should do to create policies and regulations on digital currencies. It is also expected to develop policies to enable the U.S. government to work with foreign powers to regulate crypto and its trade across international borders.

Furthermore, the order will ask other agencies, including the Financial Stability Oversight Council the Treasury Department, among others, to analyze the use of cryptocurrency in financial crimes and its impact on the environment.

Besides that, the order will also direct agencies to build on efforts by the Federal Reserve to study the possibility of launching a new central bank digital currency.

In January, the Federal Reserve issued a report that discussed the risks and benefits of U.S.-backed digital currency.

U.S. officials have remained concerned about Russia’s ability to use cryptocurrency to evade sanctions. Crypto is one of several spaces that the Biden administration is looking to beef up as it attempts to ensure that sanctions on Russia have maximum impact.

The order appears neutral on the issues of cryptocurrencies as a whole. It hints that the U.S. will not go in the direction of banning the use of technology. In the recent past, as reported by Blockchain.News. Several countries, including China, issued a complete ban on cryptocurrency within their jurisdictions.

The implication in the order is that cryptocurrency will remain a part of the U.S.U.S.nomy for years to come. The order signals that regulations are underway. It means that significant changes are on the way to how the U.S.U.S.overnment handles a technology that has until now seen its development majorly driven by private businesses.



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Biden Administration Sees Crypto Regulation as a Matter of National Security

Key Takeaways

  • The Biden administration is set to order government agencies to propose crypto regulations within weeks.
  • The order is intended to develop a regulatory framework as a matter of national security.
  • The memorandum will task bodies to keep innovation in mind while still tackling issues like illicit activity.

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President Joe Biden’s administration has plans to task various federal agencies with regulating crypto assets as a matter of national security. The executive order is expected within weeks. 

Biden to Task Agencies with Proposing Crypto Regulations

Cryptocurrency regulation is an important component of national security, according to the Biden administration. 

Per a Barron’s source, the White House will order government bodies to conduct analyses on digital assets including cryptocurrencies, stablecoins, and non-fungible tokens for the purpose of creating a regulatory framework. According to the source, the administration’s goal is to take a holistic look at crypto assets in order to “develop a set of policies that give coherency to what the government is trying to do in this space.” 

The White House, nevertheless, has no plans to issue recommendations of its own but rather would require government agencies to put forth their own proposals, for which the White House would synthesize and bring together. 

The Barron’s source emphasized the administration’s desire for the “harmonizing” of regulations, particularly globally and between nations since “digital assets don’t stay in one country.” 

Many parts of the government are set to be involved, including the State Department, Treasury Department, Council of Economic Advisers, National Economic Council, and the White House National Security Council. 

The current lack of consensus on varying issues (e.g. what constitutes a security) is something the Biden administration seeks to address. 

Per Bloomberg last week, though, the administration’s focus is not only on issues like digital currencies being used for illegal activities or the overall, but rather on the systemic impacts crypto assets might have. In fact, the White House also seems keen on allowing the U.S. to be at the forefront of the growing space’s innovation. 

Regulators in the U.S. have already been interacting with the digital asset subject recently. Congress had colorful hearings on stablecoin regulation last month, as well as hearings on the environmental impact of cryptocurrencies only last week. Meanwhile, The Federal Reserve finally released its long-awaited central bank digital currency report on Jan. 20. Other nations, though, are taking different approaches, with the Bank of Russia flirting with a crypto ban and top EU regulators urging a Proof-of-Work mining ban. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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Biden Administration Preparing To Release Government-Wide Strategy for Dealing With Digital Assets: Report

The Biden administration is reportedly expected to take sweeping action on the digital asset space in the weeks ahead.

According to a new Bloomberg report, a number of unnamed insiders reveal that senior administration officials plan to unveil an executive order that will provide details on the regulatory, economic and national security risks posed by digital assets.

The executive order will also task various government agencies to submit reports in the latter half of the year.

The Financial Stability Oversight Council is one group expected to offer insights in the coming months, with the possibility of the State Department and the Commerce Department being consulted as well.

The White House is also likely to discuss the possibility of supporting a central bank digital currency (CBDC), which would be a digital asset backed by the US government.

Just last week, the Federal Reserve released a long-anticipated report on the feasibility of issuing a CBDC in the United States.

The Fed report says,

“A CBDC could potentially serve as a new foundation for the payment system and a bridge between different payment services, both legacy and new.

It could also maintain the centrality of safe and trusted central bank money in a rapidly digitizing economy.”

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