The Biden administration is reportedly looking at how to increase oversight of crypto to protect retail investors and prevent illegal activity

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The Biden administration is reportedly looking at how to increase oversight of the cryptocurrency market to protect retail investors, sources told The Washington Post Tuesday. The administration is also analyzing potential gaps that may be used to finance illicit activities, sources said.

Earlier this month, White House officials and Treasury department staff were in discussion about the risks that the rapidly evolving digital space could bring, according to The Washington Post. Not looped in, however, were higher-ups, including Treasury Secretary Janet Yellen, The Post said.

Yellen has been critical of cryptocurrencies in the past, calling out "misuse" of cryptocurrencies, which she described in February as "a growing problem."

"I see the promise of these new technologies," the former Federal Reserve chief said. "But I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism."

The cryptocurrency market crashed last week, wiping out 47% of the market cap for global digital currencies after a seven-day sell-off.

Nevertheless, federal regulators don't think the extreme price fluctuations are threatening the stability of financial markets, sources told The Washington Post.

"They're aware of the fact that there are all kinds of risks in the abstract and things to look out for, but they are still largely in a wait-and-see posture," a source said.

Administration officials did discuss how to let investors to "dogecoin to their heart's content," while regulating the market, sources told The Post.

Dogecoin, the meme currency that started as a joke in 2013, is now up more than 7,000% year-to-date according to CoinDesk due in large part to the public hype fueled by figures like Elon Musk.

In April, the House of Representatives passed the Eliminate Barriers to Innovation Act of 2021, a bill that aims to bring the Securities and Exchange Commission and Commodities Futures Trading Commission together for work on digital asset rules.

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