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Janet Yellen calls for crypto regulations to reduce risk and fraud

Treasury Secretary Janet Yellen says more government regulation is needed to monitor the proliferation of cryptocurrency and other digital assets and deter fraudulent and illegal transactions.

In practice, one outcome would be that users would receive documentation of their crypto trades for use in filing their taxes.

“Taxpayers should receive the same type of tax reports for digital asset transactions that they receive for stock and bond transactions so they have the information they need to report their income to the IRS,” Yellen said Thursday the American University.

It was Yellen’s first speech on cryptocurrencies since President Joe Biden signed an executive order on digital assets in March.

The government’s actions this year follow several high-profile examples of suspected cryptocurrency laundering and fraud.

In February, the Justice Department announced its largest-ever financial seizure — more than $3.6 billion — and the arrest of a couple accused of conspiring to launder billions of dollars in cryptocurrency involved in the 2016 hack of a virtual exchange office were stolen.

Janet Yellen
It was Yellen’s first speech on cryptocurrencies since President Joe Biden signed an executive order on digital assets in March.
AP

And in March, federal authorities accused two siblings cheating thousands investors of $124 million in unregistered securities offerings with a digital token.

“Where there are gaps, we will make policy recommendations, including assessing potential regulatory action and legislative changes,” Yellen said.

Biden’s executive order on government oversight of cryptocurrency calls on the Federal Reserve to consider whether the central bank should create its own digital currency and directs the Treasury Department and other federal agencies to study cryptocurrency’s impact on financial stability and national security.

As banks and other traditional financial firms become more involved in digital asset markets, Yellen said “regulatory frameworks need to adequately reflect the risks of these new activities.”

The use of cryptocurrency and other digital assets has exploded in recent years. Polls show that about 16% of adult Americans – or 40 million people – have invested in cryptocurrencies. And 43% of men aged 18-29 have invested their money in cryptocurrency.

“Our regulatory frameworks should be designed to support responsible innovation while managing risks – particularly those that could disrupt the financial system and economy,” Yellen said.

Lawmakers and administration officials have also raised concerns that Russia could use cryptocurrencies to avoid the fallout from the avalanche of sanctions imposed on banks, oligarchs and the energy industry over the past few weeks as a result of the invasion of Ukraine. But tax officials and cryptocurrency experts have said that crypto is not a workaround for sanctions.

https://nypost.com/2022/04/07/janet-yellen-calls-for-crypto-regulations-to-cut-risks-fraud/ Janet Yellen calls for crypto regulations to reduce risk and fraud

DUSTIN JONES

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