The administration of U.S. President Joe Biden is taking aim at cryptocurrencies in a new report authored by the Council of Economic Advisers.
The economic report argues that many aspects of the cryptocurrency sector are creating ongoing problems for consumers, the global financial system, and the environment.
The report has been released amid growing industry concerns that regulators in the U.S. are looking to reign in cryptocurrency exchanges, lenders and issuers of digital coins and tokens.
The Council of Economic Advisers said it investigated several claims from the cryptocurrency industry, ranging from the role of digital assets as investment vehicles and payment tools to the potential use of crypto in payment systems.
“So far, crypto assets have brought none of these benefits,” the report states.
Multiple failures in the cryptocurrency sector last year, including TerraUSD’s collapse and the $8 billion U.S. bankruptcy of the FTX exchange, were cited as examples of how investors have been harmed.
The government report also highlights instances of fraud, such as Long Island Iced Tea changing its name to Long Blockchain to take advantage of a boom in crypto prices despite having nothing to do with blockchain technology.
While it outlines a litany of concerns, the report offers few recommendations for future regulations or actions to be taken on the part of Congress.
“The crypto asset space requires coordination by various agencies and deliberations about how to address the risks they pose,” concludes the report.
Despite the ongoing criticisms, cryptocurrencies have rallied to start the year, with the price of Bitcoin up 70% since early January and now trading at $28,250 U.S.
