The Biden Administration is paying close attention to Silvergate Capital, a cryptocurrency bank based in La Jolla, California, which recently issued a warning of going concerned and announced the closure of its exchange network.
This development has caught the attention of the White House, and during her Monday briefing, Karine Jean-Pierre, the White House press secretary, noted that the administration is aware of the situation and monitoring the reports closely. Although she did not specifically comment on Silvergate, Jean-Pierre highlighted that this is not an isolated case, as numerous cryptocurrency companies have recently faced significant issues.
In response to these challenges, banking regulators have issued guidelines to help banks protect themselves from risks associated with crypto. As for Silvergate, the parent company of Silvergate Bank stated that it would not be able to file its annual financial report with the Securities and Exchange Commission promptly.
The company cited the need to provide additional time for external auditors to complete certain procedures, including a review of unrecorded adjustments and the evaluation of the effectiveness of its internal control over financial reporting.
Given the critical role that financial institutions play in the economy, the Biden Administration is closely monitoring the situation to ensure that Silvergate and other cryptocurrency companies operate within the parameters of the law and do not pose a threat to the financial system.
Crypto Risks have put the U.S. on High Alert
With the recent crumbling of FTX and several other big-name bankruptcies including TerraLabs, Three Arrows Capital, and Celcius, U.S. regulators are now on high alert like never before. In response, the SEC has taken a more aggressive stance to clamp down on the crypto industry, which has drawn harsh criticisms from insiders.
Yet, what if these new directives weren’t just a product of regulatory whim, but rather, directives straight from the top of the political food chain? According to Jean-Pierre, insiders speculate that President Joe Biden himself has been continuously urging Congress to take action to protect Americans from the risks posed by the volatile crypto market.
Jean-Pierre further stated;
“As you know, the President has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets, and he will continue to do so. We won’t speak to this particular company, as we have not with other cryptocurrency companies, but we’re going to continue monitoring the reports, and clearly, we’re aware of the situation.”
Jean-Pierre’s choice of words in using the phrase “take action” is noteworthy, especially when considering the criticism from various CEOs in the crypto industry. These CEOs have voiced their concern over the strict enforcement tactics being employed by the SEC instead of focusing on developing a comprehensive legislative framework to regulate the cryptocurrency market.
The lack of a clear regulatory framework has been a longstanding issue in the industry, leading to uncertainty and inconsistency in the application of laws and regulations. Therefore, Jean-Pierre’s call to take action serves as a reminder of the need for a more holistic approach to regulation that balances enforcement and the creation of a comprehensive framework.
The Biden Administration is closely monitoring the situation at Silvergate Capital, a cryptocurrency bank that recently issued a warning of going concerned and announced the closure of its exchange network. The administration is aware of the situation and is monitoring reports closely, along with other cryptocurrency companies facing significant issues.
The banking regulators have issued guidelines to help banks protect themselves from risks associated with crypto. The Biden Administration is ensuring that Silvergate and other cryptocurrency companies operate within the parameters of the law and do not pose a threat to the financial system.