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Tag: WHITE HOUSE
White House Plans To Review the Potential Role of Crypto Assets in Corruption, According to New Report
The White House is planning to probe the corruption risks associated with crypto assets, according to a recent report.
The White House report titled the “United States Strategy on Countering Corruption” indicates the US government will continue to review the ways corruption contributes to “the risk posed by digital assets.”
Explains the White House,
“Advances in digital technology have dramatically improved the efficiency, convenience, and reach of digital alternatives to cash, and accelerated the usage of and commercial trading in digital assets across the world.
At the same time, digital assets have been used in support of a variety of illicit activities, including proliferation financing, ransomware attacks, human and narcotics trafficking, fraud, corruption, and sanctions evasion.”
The White House also says the US government plans to assist other countries with the “analysis and development” of central bank digital currencies (CBDC).
Additionally, the report notes that the Department of Justice (DOJ) will utilize the newly established National Cryptocurrency Enforcement Team (NCET) to focus on complex crypto investigations, including “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”
The DOJ first announced the creation of NCET in October.
Read the full White House report here.
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Crypto tumblers, exchanges under microscope as DOJ launches new task force
The White House, under the Biden-Harris administration, introduced a five-pillar strategy to counter corruption as a part of the core United States national security interest. The strategy involves establishing a new task force to address potential illicit activities on crypto exchanges and other services that can serve as avenues for money laundering.
With the motive to enhance enforcement of Anti-Money Laundering (AML) regulations, as well as criminal and civil laws, the Federal government plans to implement new tools for investigating and prosecuting money laundering offenses. Specifically for cryptocurrencies, “PILLAR THREE: Holding Corrupt Actors Accountable” highlights:
“DOJ [Deparment of Justice] will utilize a newly established task force, the National Cryptocurrency Enforcement Team, to focus specifically on complex investigations and prosecutions of criminal misuses of cryptocurrency.”
The White House mentioned that the National Cryptocurrency Enforcement Team would be particularly responsible for overseeing “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”
The DOJ has also expanded subpoena power for certain financial records maintained abroad while imposing new disclosure requirements for beneficial ownership information. The department also plans to incentivize whistleblowers for sharing information that leads to the identification and seizure of illicit proceeds.
Related: House committee announces crypto CEOs will testify at Dec. 8 hearing on digital assets
Running parallel to the White House’s latest initiative, Representative Maxine Waters, the Chair of the House Committee on Financial Services, has invited CEOs of eight major crypto companies to discuss digital assets and the future of finance, to be held on Dec. 8.
As Cointelegraph reported, the CEOs of Circle, FTX, Bitfury, Paxos, Stellar Development Foundation, Coinbase and Coinbase Global CFO will be attending the committee hearing.
Looking forward to hearing next week with @RepMaxineWaters, ranking member @PatrickMcHenry, and the full committee (@FSCDems) to discuss Crypto and national economic competitiveness for the United States. https://t.co/rVHAvaPMUd
— Jeremy Allaire (@jerallaire) December 1, 2021
Digital dollar needs broad consensus among authorities, says US Treasury Secretary
U.S. Treasury Secretary Janet Yellen has given her opinions on the potential of a digital dollar but is hesitant to come to any conclusions at this stage in proceedings. Yellen said on Thursday that she had not formed a view on whether the Federal Reserve should create a digital version of the dollar, but such a move would require broad consensus among Congress, the U.S. central bank and the White House.
This follows the recent reports that the Federal Reserve is currently researching whether an electronic version of the greenback would be beneficial or not. Yellen said that she sees both pros and cons to the digital dollar. Although she does have thoughts on its implementation, she feels more research needs to be done before coming up with any definite answers.
According to Yellen, the advantages of a central bank digital currency need further study, including its effects on banking institutions.
In contrast, Federal Reserve Governor Lael Brainard, whom President Biden has chosen for vice-chair of the US central bank, has called for urgency in establishing a digital dollar. She suggested that she can’t fathom not having one when China and other nations are developing their own central bank digital currencies, which she considers a race to the top.
Related: It’s now or never — The US has to prepare itself for digital currency
According to the Fed secretary, a consensus is required before moving forward. Yellen said that the Federal Reserve was working on a study on the issue and that it would be available soon, and they are cognizant that broad agreement among authorities would need to take place before they could move forward.
“This is a decision that’s important and needs to command consensus. There are some benefits, but there are also meaningful costs.”
As Cointelegraph reported in September, Fed Chair Jerome Powell stated that there was no need for the central bank to hurry their digital currency development plans. Despite several central banks creating their own CBDCs, Powell said the Fed was not rushing to embrace the movement.
House passes $1T infrastructure bill with crypto tax for Biden’s approval
The United States House of Representatives passed the $1.2 trillion bipartisan infrastructure bill, which if signed into law by President Joe Biden, would enforce new provisions in relation to crypto-tax reporting for all citizens.
The infrastructure bill was first proposed by the Biden administration aimed at primarily improving the national transport network and internet coverage. However, the bill mandated stringent reporting requirements for the crypto community, mandating that digital asset transactions worth more than $10,000 are reported to the IRS.
As Cointelegraph reported, the bill was first approved by the Senate on Aug. 10 with a 69-30 vote, which was met with a proposal to compromise amendment by a group of six senators — Pat Toomey, Cynthia Lummis, Rob Portman, Mark Warner, Kyrsten Sinema and Ron Wyden. According to Toomey:
“This legislation imposes a badly flawed, and in some cases unworkable, cryptocurrency tax reporting mandate that threatens future technological innovation.”
Despite the lack of clarity in the bill’s verbatim, the infrastructure bill intends to treat the crypto community’s software developers, transaction validators and node operators similar to the brokers of the traditional institutions.
The House of Representatives passed the controversial infrastructure bill to President Biden after securing a win of 228-206 votes. In addition, the crypto community showed concerns over the vague description of the word ‘broker’ that may consequently impose unrealistic tax reporting requirements for sub-communities such as the miners.
this bill is unconstitutional and inherently anti-American
private citizens have the right to financial privacy and financial freedom
absolutely shameful to see this https://t.co/O9FkVC2CF4
— Meltem Demir◎rs (@Melt_Dem) November 4, 2021
As a repercussion, the inability to disclose crypto-related earnings will be treated as a tax violation and felony.
Related: 8-word crypto amendment in Infrastructure Bill an ‘affront to the rule of law’
Legal experts recommended amendments to the infrastructure bill that considers failure to report digital asset transactions as a criminal offense.
Abraham Sutherland, a lecturer from University of Virginia School, cited concerns over the US government’s decision to blanket term crypto sub-communities as brokers:
“It’s bad for all users of digital assets, but it’s especially bad for decentralized finance. The statute would not ban DeFi outright. Instead, it imposes reporting requirements that, given the way DeFi works, would make it impossible to comply.”
Biden Administration Weighs In on Competing Crypto Amendments As Final Vote Approaches
The White House is weighing in on a last-minute dash to modify a set of cryptocurrency tax provisions in the bipartisan infrastructure bill.
The provisions are designed to help pay for the repair of roads and bridges, among other projects, by clamping down on potential tax evasion through the use of cryptocurrencies.
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The original, unmodified bill, as detailed by Compound Labs general council Jake Chervinsky, would expand the definition of “broker” in the tax code to include “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
The definition could impact a wide swath of participants in the cryptocurrency sphere. In response, pro-crypto Senator Cynthia Lummis, alongside Senators Ron Wyden (D-Ore) and Pat Toomey (R-Pa), created an amendment they say would specifically clarify that miners of all blockchains as well as software developers and wallet makers will not have to comply with any reporting requirements in the legislation.
Chervinsky, who is also a member of the Blockchain Association, a crypto-focused public policy group, says that the amendment was poised to succeed until a second, surprise amendment emerged from US Senators Rob Portman (R-OH), Mark Warner (D-VA) and Kyrsten Sinema (D-AZ).
In contrast, the second amendment would only exempt proof-of-work miners and crypto wallet creators from the broad reporting requirements of the infrastructure bill. Soon after the surprise amendment was announced, the Biden Administration threw its weight behind it, announcing support.
But Senator Lummis (R-WY) says those changes don’t go nearly far enough.
She’s calling on the crypto community to contact their senators to voice their support for the Wyden-Toomey-Lummis amendment before a potential weekend vote on the bill.
“We NEED you. Please call your Senators. Please tweet. Please email. We are facing major headwinds on the Wyden-Lummis-Toomey amendment. Burying financial innovation in red tape and sending devs plus miners on info collection wild goose chases for info they don’t know is horrible policy.”
The final vote on the infrastructure bill which seeks to raise $28 billion from the cryptocurrency sector is tentatively scheduled for August 7th.
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Biden Backs Infrastructure Bill Draft Posing Threat to DeFi
Key Takeaways
- The Senate is debating a massive infrastructure bill bearing concerning crypto-related provisions.
- The White House has backed an amendment to the bill that threatens DeFi and Proof-of-Stake validators.
- The final vote on the amendment is due on Saturday.
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The White House has weighed in on the ongoing infrastructure bill debates.
White House Backs Controversial Bill Amendment
The Biden Administration has backed an amendment to the infrastructure bill draft that could pose strict tax reporting rules on DeFi developers and Proof-of-Stake validators.
Senators Rob Portman and Mark Warner submitted a draft Thursday in response to an earlier amendment to the bill’s cryptocurrency provision. The new draft excludes only Proof-of-Work miners from the provision defining brokers, leaving room for crypto developers and Proof-of-Stake validators to be labeled as such. If passed, it would mean that DeFi developers and Proof-of-Stake validators in the U.S. would have to adhere to strict tax reporting rules.
The White House formally backed the amendment in a statement Thursday. A note posted by White House deputy press secretary Andrew Bates read:
“The Administration believes this provision will strengthen tax compliance in this emerging area of finance and ensure that high income taxpayers are contributing what they owe under the law. We are grateful to Chairman Wyden for his leadership in pushing the Senate to address this issue, however we believe that the alternative amendment put forward by Senators Warner, Portman, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance.”
The Senate is currently debating a $1 trillion bipartisan infrastructure bill to go towards various projects driving economic growth. It needs to raise $550 billion, with $28 billion to be secured through stringent cryptocurrency taxation.
The Senate included new provisions to expand the Tax Code’s definition of a “broker.” The original draft of the bill proposed the following definition:
“Any person who (for consideration) regularly provides any service or application (even if non-custodial) to facilitate transfers of digital assets, including any decentralized exchange or peer-to-peer marketplace.”
The proposal sparked debate across the cryptocurrency industry as the definition would apply to almost everyone using the technology, including miners, validators, developers, and non-custodial wallets. Coin Center and other advocacy groups then persuaded the Senate to amend the definition to focus on those providing a service on behalf of someone else.
Still, many crypto advocates argued that the new definition was too vague. The Blockchain Association posted a tweet stating that the wording posed “fundamental concerns” about the provision’s definitions.
In response to the debates surrounding the definition, Senators Ron Wyden, Pat Toomey, and Cynthia Lummis proposed a more crypto-friendly amendment Wednesday, suggesting a definition that would exclude miners, validators, protocol developers, and wallet creators.
The following day, Portman and Warner proposed their own rival amendment that only excludes Proof-of-work miners and wallet creators from the provision. Many crypto followers have pointed out that this provision could mean validators on Proof-of-Stake chains like Binance Smart Chain, Cardano, and Ethereum 2.0, and developers of DeFi protocols would be required to follow strict tax reporting requirements.
The statement from the White House has left many in the industry feeling blind-sided. Few expected the Biden Administration’s input on the issue, and it could increase the likelihood of Portman and Warner’s draft passing through Senate. As some have pointed out, it’s particularly surprising to see the White House supporting provisions that favor the more energy-intensive Proof-of-Work consensus mechanism over Proof-of-Stake given Biden’s pledges to tackle climate issues.
The final voting on the amendments is likely to happen Saturday, leaving the crypto industry with one day to lobby the Senate to approve the Wyden-Toomey-Lummis amendment.
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Tim Wu, the ‘father of net neutrality’ reportedly owns over $1M in Bitcoin
Cryptocurrencies might be anathema for certain members of United States President Joseph Biden’s administration, but that has not stopped one staffer from owning a small fortune in Bitcoin (BTC).
According to a report by Politico on Monday, Tim Wu, special assistant for technology and competition policy to the president at the National Economic Council, owns over $1 million in Bitcoin.
Wu’s BTC ownership came to light after a recent personal financial disclosure that also revealed his ownership of Filecoin (FIL). Wu reportedly owns between $1 million and $5 million worth of Bitcoin as well as between $100,001 and $250,000 worth of FIL tokens.
The White House adviser’s Bitcoin pot allegedly constitutes a major portion of Wu’s financial portfolio estimated to be between $4 million and $11.5 million in value. Based on his estimated Bitcoin ownership, Wu may hold between 29 and 146 BTC.
Wu, a prominent legal scholar and Columbia University law professor has previously argued against Bitcoin’s value proposition. Back in December 2018, Wu joined the chorus of critics labeling BTC to be a bubble as the premier crypto rallied to a then all-time high near $20,000.
The legal scholar is also a noted critic of big tech firms and was responsible for coining the term “net neutrality” back in 2003. According to Politico, an anonymous source at the White House says Wu has recused himself from policy matters related to Bitcoin and cryptocurrency.
Back in August 2017, Wu weighed in on the Bitcoin hard fork saga that led to the emergence of Bitcoin Cash (BCH). At the time, Wu criticized Coinbase’s initial decision to not support the fork temporarily preventing users of the exchange from accessing BCH.
Bitcoin and crypto in general are coming under increased scrutiny under the Biden administration with the new anti-BTC narrative seemingly shifting towards ransomware attacks. Both Gary Gensler, chairman of the Securities and Exchange Commission and Treasury Secretary Janet Yellen have hinted at stricter cryptocurrency regulations.
Biden administration is reportedly reviewing ‘gaps’ in crypto regulation
Officials within the Biden administration are reportedly studying “gaps” in cryptocurrency regulations following the latest bout of volatility in the market, sending a signal that new rules could soon be proposed.
People familiar with the matter informed The Washington Post that White House officials are studying whether digital assets like Bitcoin (BTC) can be used to finance terrorist activities. They are also mulling whether retail investors should be protected from the extreme price fluctuations of digital asset markets.
Bitcoin’s brief collapse below $30,000 last week triggered a panic wave of selling, as digital asset markets shed over $1 trillion in value in just ten days. Peak to trough, the digital asset market was nearly cut in half between mid-April and mid-May.
A new proposal from the United States Treasury that would require cryptocurrency holders to report all transfers above $10,000 to the Internal Revenue Agency was one of many catalysts behind the decline. The Biden administration’s plan to double the IRS’ workforce over the next decade was also a source of worry among investors who feel that the United States is quickly losing its competitiveness on matters related to taxation and digital asset markets.
At present, federal lawmakers do not believe that wild swings in crypto prices can threaten broader financial-market stability, The Washington Post claimed, although the risks are worth monitoring. “They’re aware of the fact that there are all kinds of risks in the abstract and things to look out for, but they are still largely in a wait-and-see posture,” the anonymous source said.
At its peak, the cryptocurrency market was collectively valued at over $2.5 trillion, which is tiny in comparison to the broader financial system. However, as crypto continues to grow, what the government deems to be an acceptable risk may change.
Scaramucci: Bitcoin will Reach $100k by End Year
Anthony Scaramucci–the co-founder of SkyBridge Capital, thinks the Bitcoin price will reach $100k by the end of 2021, a forecast aligning with what permabulls maintain.
Bitcoin Firm above $50k
In an interview with CNBC’s Squawk Box on Feb 17, the former White House Communications Director maintains his previous stance. He also joins a long list of analysts, including Citibank and Anthony Pompliano.
As of writing on Feb 17, the Bitcoin price is trading above $51k, registering a new all-time high and subsequently overcoming the solid sell wall of $50k.
The breakout points to relentless buyers, comprising Bitcoin Trusts like Grayscale Investment, riding on the current crypto Bull Run, investing on behalf of institutions, and high retail inflow.
Traders, confident of another higher-high wave, are positioning themselves in Bitcoin, purchasing the digital asset for speculation, and hedge inflation.
The $180 Million Investment in Bitcoin
SkyBridge Capital, in late December 2020, made a $180 million investment in Bitcoin, as BTCManager reported.
Through the SkyBridge Bitcoin Fund L.P., high Networth investors can get exposure to Bitcoin by investing a minimum of $50k.
Scaramucci’s fund invested $25 million into the Bitcoin fund. Overly, the fund is positive on crypto. They expect hedge funds, insurance funds, and Registered Investment Advisors (RIAs) to sink millions into digital assets.
Earlier, in an interview, Scaramucci said he believed in Bitcoin’s long-term trajectory. He adds that Bitcoin, despite the expansion in crypto and the rapid emergence of other assets, will be the category winner.
In his view, Bitcoin utility and improving liquidity make it attractive for institutions.
GameStop Proves Bitcoin Works
Following the retail squeeze of GameStop, Scaramucci said it was enough proof that Bitcoin works.
The impact of small groups of traders against the establishment, he added, vividly demonstrates decentralized finance’s power.
He said:
“The activity in GameStop is more proof of concept that Bitcoin is going to work. How are you going to beat that decentralized crowd? That, to me, is more affirmation about decentralized finance. It’s the age of the micro investor, and you better take it seriously – otherwise, you’ll get taken to the cleaners.”
As BTCManager reports, JP Morgan analysts say Bitcoin volatility should decrease for BTC/USD to steady above $50k.
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