CHIEF SAYS STABLECOINS

Considering the profound impact stablecoins could have on the established banking system, U S regulators must ensure the digital tokens fit in without disrupting it, according to Martin Gruenberg (chairman of the FDIC). Gruenberg's agency will significantly impact how stablecoins are regulated in the United States Recent sanctions against firms that misrepresent how FDIC deposit insurance backstops the FDIC has also imposed their operations

Network (FinCEN) also imposed a $60 million penalty on him, marking the first penalty levied against a Bitcoin mixer

Seized Assets and Gary's Deception

During the prosecution, law enforcement officials seized

Gruenberg said that U S banks have increasingly offered crypto services, including custody of customers' digital assets, which is why his agency has remained cautious about accepting regulated lenders to participate multiple assets, including a cryptocurrency storage device that was initially inaccessible due to security features Gary James Harmon, however, managed to covertly send himself the 712 Bitcoins by recreating Bitcoin wallets using his brother's credentials Authorities reported that he subsequently laundered the assets, transferring the stolen Bitcoin to two other online mixing services� As a result of his illegal actions, Gary Harmon agreed to forfeit cryptocurrencies worth over $20 million, according to the Justice Department� The forfeited assets included 17 4 million Dogecoin, around 647 Bitcoin, and just over 2 Ethereum

Although coin mixers have been praised as essential tools for preserving the privacy of crypto transactions, government officials have criticized these services as instrumental to

Gruenberg noted that the Financial Stability Oversight Council (FDIC) also inputs into the federal government's policy towards stablecoins, which will work with the Federal Reserve's future realtime payments system, FedNow Besides being used for trading volatile cryptocurrencies, stablecoins are necessary to create a digital currency issued by a central bank in the U S "A stablecoin for payments could fundamentally alter the banking landscape," Gruenberg said A new form of shadow banking could be created with payment stablecoins, "possibly resulting in forms of credit disintermediation that may harm the viability of many U S banks " hackers and other malicious actors Coin mixers obscure the origin and destination of funds by combining various transactions

Treasury Department's Actions and Legal Challenges

In the summer of last year, the U�S� Treasury Department imposed sanctions on the coin mixer Tornado Cash, effectively prohibiting U S citizens from engaging with the

President Joe Biden has yet to name a permanent replacement for Gruenberg, who previously served as FDIC chairman Two people were nominated last month to join the board, and the next chairman is reportedly on the way Aside from his roles at the Financial Stability Oversight Council, Gruenberg is involved in cross-agency crypto oversight efforts� However, he has been because "our authority is clearly limited, particularly when it comes to protecting consumers as well as provisioning of wallets and similar services by non-bank entities " application The Treasury Department claimed that Tornado Cash was being utilized by the North Korean state-sponsored hacking group, Lazarus Group This decision faced backlash from politicians such as Rep Tom Emmer and whistleblower Edward Snowden, who dubbed it a "do or die" moment for crypto

As Gruenberg sees it, stablecoins would be sufficiently safe if they were offered through bank subsidiaries, fully backed by short-term treasury bonds, and placed on regulated "permissioned ledger systems "

"Knowing all parties involved in payment stablecoin activitiesincluding nodes and validators - is crucial to ensuring compliance with anti-money laundering regulations, preventing terrorism financing, and deterring sanction evasion " —Crypto Weekly

The crypto policy nonprofit Coin Center is currently suing the Treasury Department, accusing it of overreach in blacklisting the tool In a related development, a Dutch court recently ruled that a Tornado Cash developer named Alexey Pertsev could be released on bail after spending nine months in detention� Pertsev celebrated his release on Twitter, reflecting on the changes in the crypto space since his arrest last August —Crypto Weekly