The Federal Reserve, FDIC, and the Office of the Comptroller of the Currency (OCC) issued a joint statement on Tuesday warning about "significant" risks crypto assets may pose to the broader banking system. “It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system,” the agencies said in a joint statement. [Stay ahead of the market]
“Given the significant risks highlighted by recent failures of several large crypto-asset companies, the agencies continue to take a careful and cautious approach related to current or proposed crypto-asset-related activities and exposures at each banking organization.”
Regulators are warning banks about a long laundry list of risks when it comes to crypto, including fraud, volatility, poor risk management, and contagion within the crypto sector.
The agencies also flagged legal uncertainties when it comes to redemptions, ownership rights, and custody practices for crypto assets.
Tuesday's statement came just minutes before Sam Bankman-Fried, co-founder and former CEO of failed crypto exchange FTX, pleaded not guilty on eight counts of wire fraud, securities fraud, and conspiracy.
Bankman-Fried faces up to 115 years in prison for his alleged role in the highest-profile crypto collapse to date.
Poster Comment:
Crazy idea here, how about we ban Fed/Banks from investing in crypto, make them more like Bureau of Weights and Measures?