AltcoinCelsius (CEL)Crypto HacksCryptocurrencyCryptocurrency RegulationNewsScams

US Federal Regulators Publish Joint Statement On Risks Associated With Crypto Assets

Just two months after the financial industry was shocked by the collapse of cryptocurrency exchange FTX, US authorities cautioned banks on Tuesday that they should be extra cautious about the dangers of fraud, confusion in the law, and false disclosures by crypto businesses.

The Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the Currency (OCC) expressed their worries about the safety and soundness of bank business models heavily focused on cryptocurrency in their first joint statement on the topic.

The authorities also stated that banks are “very likely” to be at odds with safe and sound banking practices. When they issue or keep crypto tokens on open, decentralized networks, it could strike a blow to numerous institutions’ ongoing efforts to provide customers with safe crypto services.

The fall of FTX was unwelcome and unexpected in the crypto world. In addition to causing enormous losses, it also led the regulatory bodies to tighten control of the industry.


US Regulators Caution Banks To Be Safe

In the early hours of Tuesday, three federal regulatory authorities issued a joint statement outlining the hazards cryptocurrencies pose to financial firms. The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve System (Federal Reserve) co-authored the report.

📰 Also read:  Crypto Exchange OKX Suspends Its Services in India Due to Regulatory Issues

The statement claims it is crucial to take stricter measures since businesses like FTX, Voyager, and Celsius have failed. The regulators have urged financial institutions to treat crypto assets with extra caution and attention.

The Financial Stability Oversight Council and the Federal Reserve, FDIC, and OCC declared cryptocurrency assets as a “danger group” earlier in the month. The Federal Reserve, the federal agency in charge of guaranteeing bank deposits (FDIC), and the OCC regulates two-thirds of the US banking system. 

In a joint press release, the regulatory bodies stated that cryptocurrency-related activity for commercial banks is “very likely incompatible with safe and sound banking practices.”

Thus, these financial institutions should continue to adopt a cautious and circumspect approach to present or projected operations and exposures to crypto-assets in each of their dealings “given the enormous risks highlighted by the recent bankruptcies of numerous prominent crypto organizations.”

The Fed, FDIC, and OCC believe it is crucial to prevent “risks in the crypto-asset industry from migrating to the banking system, which cannot be mitigated.” Nevertheless, the regulators state that banks can still provide their clients with crypto-related services. 

📰 Also read:  What is Keplr Wallet? - A Comprehensive Guide to the Cosmos Wallet

After the collapse of the FTX trading platform in mid-November, US Treasury Secretary Janet Yellen vehemently argued for “more effective supervision” of the cryptocurrency industry. Several Fed officials have also advocated for industry regulation.

The Biden administration is also debating whether or not to establish a digital dollar, which has numerous benefits and potential benefits but also several concerns.

Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.

📰 Also read:  The Best Celsius (CEL) Wallets to Use in 2024


Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Skip to content