Feds, comptroller release warning on cryptocurrency for banksATM Marketplace

Fin-Tech /

The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have released a joint statement warning banks of the risk of dealing with cryptocurrency.

“The events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector. These events highlight a number of key risks associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of,” the organizations said in a statement.

They identified a variety of risks including:

  • Volatility.
  • Lack of oversight on decentralized networks.
  • Fraud.
  • Inaccurate disclosures by cryptocurrency companies.
  • High risk stablecoins.
  • Contagion risk via interconnections among crypto users such as opaque lending and investing.

The organizations emphasized that banks are “neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation. The agencies are continuing to assess whether or how current and proposed crypto-asset-related activities by banking organizations can be conducted in a manner that adequately addresses safety and soundness, consumer protection, legal permissibility, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules.”

Source link