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Banks warned over cryptocurrency market

January 5, 2023

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REGULATORS have issued a stark warning to banks over the potential dangers associated with the cryptocurrency market.

Watchdogs told financial institutions to be wary of potential fraud,in the wake of the collapse of the exchange company FTX.

FTX was thought to have 80,000 customers in the United Kingdom.

The US Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said they are watching the crypto activities of banking organisations.

A statement said: “The events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector.

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“The regulators also said that issuing or holding crypto tokens, which are stored on public, decentralised networks was “highly likely to be inconsistent with safe and sound banking practices

“It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system.”

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