Federal bank regulatory agencies in the United States on Tuesday raised the alarm of “key risks” for banks associated with crypto-assets and the crypto-asset sector.
The Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency issued a joint statement.
The alert describes the “several risks”, as demonstrated by the significant volatility and vulnerabilities over the past year.
The agencies said they would take a cautious approach related to current and proposed crypto-asset-related activities and exposures at banking organizations.
They promised to continue to assess whether the activities are conducted in a manner that is safe, legally permissible, and in compliance with applicable laws and regulations.
The agencies “will continue to closely monitor crypto-asset-related exposures of banking organizations, and, as warranted”. An additional statement will be issued later.
In July 2021, CoinMarketCap estimated that about $98billion was wiped off the entire cryptocurrency market within 24 hours.
Five months earlier, the Central Bank of Nigeria (CBN) ordered banks to stop transacting in cryptocurrencies, threatening to sanction defaulters.
In May 2021, the Chinese government threatened to deal with financial institutions that offer cryptocurrency services.
A joint statement by the regulators declared virtual currency has no real value, warning that the price can be manipulated.
In an interview with Fox Business after leaving office, former US President Donald Trump declared bitcoin “a scam”.
“Bitcoin, it just seems like a scam. I don’t like it because it’s another currency competing against the dollar”, Trump said.
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