In response to Vice President Joe Biden’s executive order aimed at protecting digital assets, the United States Department of the Treasury produced three papers on the topic on Friday. A smaller strategy is geared on retaliating against the illicit finance-related hazards, and one of the publications is dedicated to crypto assets specifically.
The US Treasury Releases a Report on the Dangers of Digital Assets
Cryptocurrency discussions have been pessimistic from the get-go, with skeptics pointing out that the promised revolution in the efficiency of financial services that blockchain technology’s proponents and developers have promised has not yet materialized. The majority of the relevant paper is devoted to a descriptive overview of the assets within the crypto sector, after which the dangers posed by this market to consumers are highlighted.
The paper breaks down potential threats into three groups. Initially, there are dangers associated with the various actions taken within the crypto ecosystem. They say that last year saw a massive increase in crypto frauds and that this year would set a new high for fraud involving cryptocurrencies. Various forms of openness were also addressed.
Next, we’ll look through operational risks, such as those associated with information system vulnerabilities, external interruptions, human mistake, and management and governance breakdowns. The remaining hazards, which are mentioned separately, are all related to the role of the intermediary. Investors in traditional markets face various dangers, including custody issues and market volatility, according to the report.
The most valuable part of the research is devoted to a thorough examination of the risks and benefits posed by crypto assets to vulnerable populations. The lengthy statistical data presented in this section is a major contributing factor. The report proposes three changes. First is vigilant surveillance, which incorporates increased enforcement, information exchange, and inter-agency cooperation.
The Department of Defense suggests approaching cryptocurrency threats from a national security perspective.
The second recommendation is that the agencies create more regulations and guidance. In addition, it is suggested that related educational opportunities be expanded. The risks associated with crypto assets are highlighted in the research, which suggests that they should be addressed from a national security perspective. It has proposed seven top-level actions, most of which are directed at local and global enforcement and monitoring efforts.