Yellen calls for crypto regulation to reduce risks, fraud

Apr 7, 2022, 4:02 AM | Updated: Apr 11, 2022, 3:53 pm
FILE -Treasury Secretary Janet Yellen listens during a House Committee on Financial Services hearin...

FILE -Treasury Secretary Janet Yellen listens during a House Committee on Financial Services hearing, Wednesday, April 6, 2022, on Capitol Hill in Washington. Treasury Secretary Janet Yellen says more government regulation is needed to police the proliferation of cryptocurrency and other digital assets and to ward off fraudulent and illicit transactions. (AP Photo/Evan Vucci, File)

(AP Photo/Evan Vucci, File)

WASHINGTON (AP) — Treasury Secretary Janet Yellen says more government regulation is needed to police the proliferation of cryptocurrency and ward off fraudulent or illicit transactions.

One potential upside is that users would get documentation of their crypto dealings for use in filing their taxes.

“Taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for transactions in stocks and bonds, so that they have the information they need to report their income to the IRS,” Yellen said in remarks Thursday at American University.

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

The administration’s action follows several high-profile examples of alleged cryptocurrency laundering and fraud this year. In February, the Justice Department announced its largest-ever financial seizure — more than $3.6 billion — and the arrests of a couple accused of conspiring to launder billions of dollars in cryptocurrency stolen from the 2016 hack of a virtual currency exchange.

In March, federal regulators accused two siblings of defrauding thousands of investors out of $124 million in unregistered securities offerings involving a digital token.

“We will make policy recommendations, including assessment of potential regulatory actions and legislative changes,” Yellen said.

Her speech centered on the importance of reducing digital currencies’ risks to the financial system, along with maintaining the international prominence of the U.S. dollar.

“We have a strong interest in ensuring that innovation does not lead to a fragmentation in international payment architectures,” she said, adding that over the next six months, Treasury will work with the White House and other agencies to develop reports and recommendations on digital currencies.

Biden’s cryptocurrency executive order urges the Federal Reserve to explore whether the central bank should create its own digital currency and directs federal agencies, including the Treasury Department, to study the impact of cryptocurrency on financial stability and national security.

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

The use of cryptocurrency and other digital assets have exploded in recent years. Surveys show that roughly 16% of adult Americans — or 40 million people — have invested in cryptocurrencies. And 43% of men age 18 to 29 have put their money into cryptocurrency.

The White House said in March that digital assets have reached a market cap of $3 trillion last November from $14 billion just five years prior.

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

Lawmakers and administration officials have also voiced concerns that Russia may be using cryptocurrency to avoid the impact of the avalanche of sanctions imposed on banks, oligarchs and the energy industry in the past weeks due to the invasion of Ukraine.

But Treasury officials and cryptocurrency experts have said crypto is not a workaround for sanctions.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Today in History: June 25, Anne Frank’s diary published

Today in History Today is Saturday, June 25, the 176th day of 2022. There are 189 days left in the year. Today’s Highlight in History: On June 25, 1876, Lt. Col. Colonel George A. Custer and his 7th Cavalry were wiped out by Sioux and Cheyenne Indians in the Battle of the Little Bighorn in […]
21 hours ago
FILE - Chinese President Xi Jinping, left, and Hong Kong's new Chief Executive Carrie Lam attend th...
Associated Press

China’s Xi to visit Hong Kong for handover anniversary

BEIJING (AP) — Chinese leader Xi Jinping will visit Hong Kong to celebrate next week’s 25th anniversary of the former British colony’s return to China following a crackdown on a pro-democracy movement that has inflamed tension with Washington and Europe. Xi will attend an anniversary gathering and the first meeting of the new government of […]
21 hours ago
FILE - Planes sit on the tarmac at the Des Moines International Airport, Monday, June 13, 2022, in ...
Associated Press

Airlines aim to shift blame for flight problems to FAA

DALLAS (AP) — Airlines under scrutiny for widespread flight disruptions are renewing their criticism of the government agency that manages the nation’s airspace, saying that understaffing at the Federal Aviation Administration is “crippling” traffic along the East Coast. Airlines for America, which represents the largest U.S. carriers, said Friday it wants to know FAA’s staffing […]
21 hours ago
FILE - Investigators search for evidences outside Robb Elementary School in Uvalde, Texas, May 25, ...
Associated Press

Graduating Uvalde High School class remembers slain children

UVALDE, Texas (AP) — Almost 300 high school seniors received their diplomas Friday in Uvalde in the shadow of the massacre of 19 elementary school students and two teachers one month earlier. The 288 red-gowned Uvalde High School seniors sat in 100-degree heat at the school stadium on the one-month anniversary of the mass shootings. […]
21 hours ago
Nancy Lee Grahn arrives with the words "Reproductive Freedom" on her body and carries a purse with ...
Associated Press

‘General Hospital’ sweeps supporting nods at Daytime Emmys

PASADENA, Calif. (AP) — Two “General Hospital” actors have won supporting honors at the Daytime Emmy Awards. Kelly Thiebaud plays Dr. Britt Westbourne and Jeff Kober portrays Cyrus Renault on the ABC drama. A gleeful Thiebaud won on her first nomination Friday night. “I cannot believe this. I am so shocked,” she said. “My brother, […]
21 hours ago
Associated Press

California GOP Rep. Valadao advances in US House district

LOS ANGELES (AP) — Rep. David Valadao advanced Friday to a November runoff in a Democratic-tilting district in California’s Central Valley, surviving a challenge from a fellow Republican who faulted the congressman for his vote to impeach then-President Donald Trump. With most of the votes tallied in the 22nd District, Valadao had about 26% of […]
21 hours ago

Sponsored Articles

...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
...
Canvas Annuity

The secret to guaranteed retirement income

Annuities aren’t really a secret, but they are so misunderstood that they might as well be. Once you understand what an annuity is and how it can benefit you, you could decide this “secret” is the perfect supplement to your retirement plan.
Yellen calls for crypto regulation to reduce risks, fraud