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The United States Is Again Warning About Crypto, What's Up? | FINANCE

The United States Is Again Warning About Crypto, What's Up? | FINANCE

The United States (US) bank regulator issued a warning about cryptocurrencies. This was done after the collapse of the cryptocurrency exchange platform, FTX. According to a joint statement from the Federal Reserve, Federal Deposit Insurance Corp and the Office of the Comptroller of Currency, the digital currency is a cause for concern.

Because it is 'covered' by the possibility of fraud and abuse. This warning, according to the three institutions, was also accompanied by the volatility of the currency which then made it quite vulnerable.

"The risks include fraud and fraud among participants in the crypto asset sector and the risk of transmission within the crypto asset sector resulting from interconnection among participants in certain crypto assets," the three institutions wrote as quoted by CNBC International, Wednesday (4/1/2023).

During the recent crypto boom, bank executives said they needed further guidance from regulators before dealing more directly with bitcoin and other cryptocurrencies in retail and institutional trading businesses. Now, about two months after FTX's bankruptcy filing, the industry has been exposed full of poor risk management, interconnected risks, and outright fraud.

While the statement indicates that regulators are still assessing how banks can adopt cryptocurrencies while complying with their various mandates for consumer protection and anti-money laundering.

"Based on the institution's current understanding and experience, the institution believes that issuing or holding as primary crypto assets issued, stored, or transferred on open, public, and/or decentralized networks, or similar systems is likely to be inconsistent with secure banking practices. and healthy," said the three regulators.

"We have significant safety and health concerns" with banks that are focused on crypto clients or that have concentrated exposure to the sector," he added.

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