White House officials are studying potential “gaps” in oversight related to the crypto market after they were briefed by career staff members at the Treasury Department about the risks posed by cryptocurrency earlier this month, reported WSJ on Tuesday, citing people familiar with the matter.

The issue has also been raised in conversation with federal regulators, including the department’s Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) but didn’t involve the principal-level officials such as Treasury Secretary Janet Yellen.

The Treasury Department is already targeting crypto as part of its broader effort to address tax avoidance.

Now, administration officials are looking into whether crypto can be used to finance illicit or terrorist activities. They are also discussing whether some protections are needed for average retail investors.

According to WSJ, federal regulators do not see the wild swings in the crypto market as likely to threaten the broader stability of financial markets, but they do see the need for monitoring.

Officials are basically discussing “whether guardrails on crypto can be imposed while still allowing the investors to “dogecoin to their heart’s content.”’

While aware of the risks and things to look out for, officials are “still largely in a wait-and-see posture,” said one person briefed on the matter.

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