White House says more crypto regulation needed to avoid 'harming' Americans
Authorities are investigating crypto trading firm FTX for potential securities violations
The comments from the White House come after the collapse this week of cryptocurrency exchange FTX.
The White House on Thursday said more regulation is needed of cryptocurrencies to avoid harming Americans.
Speaking during a press conference, White House press secretary Karine Jean-Pierre said the Biden administration "has constantly maintained that, without proper oversight of cryptocurrencies, they risk harming everyday Americans."
FILE: Press Secretary Karine Jean-Pierre speaks to the press at the White House on November 10, 2022, in Washington, DC. (Tasos Katopodis/Getty Images / Getty Images)
"This is something that clearly we monitor and that we see as an important issue," she said. "The most recent news further underscores these concerns and highlights why prudent regulation of cryptocurrencies is indeed needed."
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The "recent news" Jean-Pierre was referring to was the collapse this week of cryptocurrency exchange FTX. Authorities are now investigating the firm for potential securities violations and analysts are bracing for a further downturn in crypto prices.
In this photo illustration, the stock trading graph of FTX Token (FTT) seen on a smartphone screen. (Rafael Henrique / SOPA Images/Sipa USA / Reuters Photos)
FTX had agreed earlier this week to sell itself to bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.
The events marked a major turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.
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The investigation into Bankman-Fried and FTX by those in the crypto world as well as securities regulators is centering on the possibility that the firm may have used customers' deposits to fund bets at Bankman-Fried's hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators.
The Associated Press contributed to this report.