US regulators turn attention to crypto amid Celsius’ troubles

Washington is keenly watching the crypto sector in the wake of crypto lender Celsius Network’s run into liquidity trouble this past week.

The lender, the largest in the crypto industry, announced a pause to all customer withdrawals and transfers on Sunday. On Monday, the broader crypto market suffered a bloodbath that sank major digital assets to price levels last seen in 2020.

The CEL token price fell as low as $0.15 this week, before recovering to hits highs above $0.56. 

The CEL/USD pair has recovered about 70% of the losses in the past 24 hours, according to trading data from CoinGecko.

Stablecoin-targeted regulations

A report by Yahoo Finance published on Tuesday says, the developments around Celsius, and which come hot on the heels of another meltdown catalyzed by the TerraUSD collapse, have the Biden administration on the lookout.

Per the report, lawmakers in Washington are mulling the possibility of extending proposals on stablecoin regulation to the wider crypto market.

Particularly, the feeling is that the President Working Group’s report on stablecoins could be looked at in line with its application across the entire crypto industry.

Focus on exchanges

An unnamed White House official is quoted to have noted that the collapse of LUNA and Celsius’ woes have brought the sector into sharp focus. 

According to the official, the thinking is around ways of ensuring regulators mitigate the risks associated with recent events.

The potential heightening of regulatory attention comes at a time US lawmakers are also looking to place the regulation of crypto exchanges under the Commodities Futures Trading Commission (CFTC).

Among the many regulatory requirements is the restrictions on exchanges regarding lending out customers’ assets. Exchanges are also expected to adhere to liquidity and capital guidelines, as well as hold customer funds separately from the company’s.