The Biden administration pushes for segregation of client assets and corporate funds on crypto exchanges

The Joe Biden administration will make all efforts to resolve the issue of separating users’ assets and corporate funds on cryptocurrency exchanges. Its representatives are ready to pressure Congress to achieve this goal.

The reason for the active actions of federal officials was the recent statement by one of the largest cryptocurrency platforms, Coinbase, to block client funds in case of the company’s bankruptcy. According to administration experts, legislative amendments should be made soon to solve the problem and protect the rights of holders of digital currencies. Separating users’ and companies’ funds is common for traditional financial institutions, including futures platforms. However, most cryptocurrency exchanges mix their own and client assets, which entails severe risks for users. Over the next few weeks, federal officials are going to obtain a revision of the cryptocurrency bills that Congress is considering. Against the backdrop of the collapse of TerraUSD and LUNA, protecting investors’ rights is becoming a priority topic in many countries, including the United States. Despite the active discussion, major players in the crypto market may not worry about the swift change in legislation for now. It is unlikely that Congress will pass the relevant laws in 2022, especially in view of the upcoming November elections. According to the most optimistic forecasts, the new rules will come into force only in 2023.