Major cryptocurrency players Coinbase and Circle are urging the U.S. government to take stricter action against foreign crypto firms and the stablecoin Tether, citing concerns about lack of regulation and potential involvement in criminal activities.
During a recent hearing with the House Financial Services Committee, Coinbase’s head of Financial Crimes Legal, Grant Rabenn, raised the alarm about criminals exploiting offshore platforms that avoid the stringent anti-money laundering (AML) regulations imposed on U.S. exchanges.
He highlighted a stark discrepancy: while the U.S. government has sanctioned only 560 crypto addresses linked to illegal activities, Coinbase’s own investigations uncovered a staggering eight million such addresses. Rabenn pointed the finger at offshore exchanges, accusing them of facilitating money laundering and other criminal activities within the U.S.
“These offshore entities are like whack-a-moles in the regulatory world,” Rabenn said, “dodging tough AML laws and assuming regulators won’t bother with them.”
Circle, another major crypto exchange, echoed these concerns, focusing specifically on Tether, a controversial stablecoin pegged to the U.S. dollar. Tether has faced criticism for its lack of transparency regarding its reserves and potential involvement in market manipulation.
Caroline Hill, Circle’s Senior Director of Global Policy and Regulatory Strategy, urged the government to ensure that “no company should be allowed to reference the U.S. dollar without having democratic values inside their U.S. dollar-backed stablecoin.”
These calls by Coinbase and Circle highlight the ongoing debate surrounding regulatory oversight in the rapidly evolving cryptocurrency landscape. While these companies operate under stricter U.S. regulations, they face unfair competition from unregulated offshore platforms and potentially risky actors like Tether.
Their push for government action reflects broader concerns about the potential for misuse and criminal activity within the crypto ecosystem. The question remains: will U.S. authorities heed their call and step up efforts to bring transparency and accountability to the entire crypto market?
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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