Joseph Stafford is a partner at the law firm Wilson Elser and provides counseling to clients in the Intellectual Property, Regulatory Compliance and Corporate/D&O Risk Management practice areas.
By signing an executive order (EO) on cryptocurrencies, President Biden has signaled an openness to the technology’s potentially positive impacts. This is a significant and encouraging development for an asset class (digital assets) that recently surpassed $3 trillion in market capitalization. If there were ever any fears of a widespread international or United States-led crackdown on Bitcoin, those appear to be gone and the United States appears to have indicated its intent to be an international leader in the area. That said, it would be naïve to suggest the EO will lead to relaxed legal or regulatory scrutiny.
By overlaying the EO with recent legal and regulatory developments, we may gain a better understanding of what to expect next in the wake of the EO from March 9, 2022.
Reasons For Guarded Optimism
For quite some time, the government’s view on Bitcoin focused on illicit activity such as ransomware, sanction avoidance and terrorist financing. While the EO suggests the government is now also considering the technology’s potentially positive impact, it still explicitly cites consumer protection and illicit finance as top priorities. In this regard, several points are worth noting.
First, the EO repeatedly emphasizes consumer protection and calls for an “unprecedented focus of coordinated action” to mitigate illicit finance and national security risks posed by cryptocurrencies. This focus becomes much more interesting when viewed alongside recent regulatory activity.
For example, we are weeks removed from a report released by the U.S. Department of the Treasury on March 1, 2022, that indicated one of the most significant illicit finance threats to the United States is the “increased digitization” of payments and