Two names affiliated with the Financial Services Committee in the American parliament wrote a report on the crypto money industry. The report from the U.S. Government Accountability Office GAO revealed government relations with the crypto industry in the country.
California attorney Maxine Waters and Massachusetts attorney Stephen Lynch, who prepared the research report, first emphasized that there is a huge gap in the crypto money industry in the USA. Officials noted that no American government agency has a clear mandate to regulate digital assets.
Blockchain technology—like #cryptocurrency—could offer faster, cheaper financial transactions. But recent price crashes & bankruptcies have raised concerns about gaps in federal regulations that could put consumers at risk. Our new report & video explore: https://t.co/1vyIgZVaYi pic.twitter.com/nxHrk1g5dQ
— U.S. GAO (@USGAO) July 24, 2023
President Biden mandated the FSOC in March 2022 to coordinate interagency cooperation, but efforts were futile. Researchers used the following statements about this situation:
“No federal agency has the authority to regulate non-secure cryptocurrencies. We need a formal coordination mechanism to respond to risks and regulate the blockchain industry.”
Experts consider a legal framework necessary, especially for the reserve control and redemption rights of crypto companies.
DeFi Risk!
The proxies, who prepared the GAO’s cryptocurrency report, secondly discussed the decentralized finance DeFi ecosystem. As the DeFi industry grows, the risks for crypto and the broader economies increase, according to the report. Experts listed the DeFi risks item by item as follows:
- Decentralized finance platforms do not have any intermediaries.
- The intermediary sector raises concerns about consumer rights.
- DeFi platforms hold great potential for the illegal economy.
The US deputies who prepared the report think that government institutions such as FinCEN should deal with this issue.
Representatives leading the GAO research commented that the solution lies in interagency cooperation. A total blockchain arrangement is possible if government agencies such as SEC, FED, CFTC FDIC cooperate.
