Washington is keeping a close eye on the cryptocurrency industry after cryptocurrency lender Celsius Network ran into liquidity problems over the past week.
The cryptocurrency industry’s largest lender announced on Sunday that it was suspending all customer withdrawals and transfers. The broader crypto market suffered a bloodbath on Monday, with the price of major digital assets falling to levels last seen in 2020.
The CEL token price fell to $0.15 this week before recovering to a high above $0.56.
According to CoinGecko trading data, CEL/USD has recovered about 70% of its losses in the past 24 hours.
Regulations for Stablecoins
A report from Yahoo Finance on Tuesday said developments around Celsius, and after another crash sparked by the TerraUSD crash, were hot, and the Biden administration is watching closely.
According to the report, lawmakers in Washington are considering the possibility of expanding the stablecoin regulatory proposal to the wider crypto market.
In particular, it feels like the Presidential Task Force’s report on stablecoins can be reconciled with their application across the crypto industry.
Focus on communication
An unnamed White House official was quoted as saying that LUNA’s collapse and Celsius’ woes have brought the industry into focus.
The idea, according to the official, is to ensure regulators mitigate risks associated with recent events.
The potential increase in regulatory attention comes as U.S. lawmakers are also seeking to bring the regulation of cryptocurrency exchanges under the Commodity Futures Trading Commission (CFTC).
Among the many regulatory requirements are restrictions on exchanges that lend out client assets. The exchange is also expected to adhere to liquidity and capital guidelines and to hold client funds separately from the company.