government

Coinbase wants the U.S. government to create a cryptocurrency regulation agency separate from the Securities and Exchange Commission (SEC).

Laws drafted in the 1930s to facilitate effective oversight of our financial system could not contemplate this technological revolution. Elements of those laws do not have room for the transformational potential that digital assets and crypto innovation make possible. They do not accommodate the efficiency, seamlessness, and transparency of digital asset markets, and thus risk serving as an unintended barrier to current innovations in the digital asset economy.

The U.S. Justice Department is forming a crypto enforcement team to “root out abuse” such as money laundering.

“We want to strengthen our capacity to dismantle the financial ecosystem that enables these criminal actors to flourish and — quite frankly — to profit from what they’re doing,” said Monaco. “We’re going to do that by drawing on our cyber experts and cyber prosecutors and money laundering experts.”

This article is from The Wall Street Journal and may be behind a paywall. The report says that the Biden administration is looking to impose regulations on cryptocurrency entities that issue stablecoins. Also called fiatcoins, the price of these coins are pegged to fiat currency, such as the US dollar.

While the report is likely to focus primarily on the risks posed by stablecoins and how to impose a bank-like framework around the firms that issue them, other key issues will likely remain unresolved, such as investor protections around the trading of stablecoins, distinct from the regulation of the companies that issue them.

Cryptocurrency exchange Coinbase announced that the SEC is threatening to sue if it launches Lend. Lend is the platform’s feature that would give users 4% APY for USD Coin.

We shared this view and the details of Lend with the SEC. After our initial meeting, we answered all of the SEC’s questions in writing and then again in person. But we didn’t get much of a response. The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion.

They also asked for the name and contact information of every single person on our Lend waitlist.

That second part is particularly gross. Update: I think this is a nice write-up from Bloomberg on the matter.