Ether has vastly outperformed bitcoin since both cryptocurrencies bottomed in June 2022. Ether’s outsized gains have come as investors anticipate a major upgrade to the cryptocurrency. the ethereum blockchain is called a “fusion”.
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U.S. bank regulators warned financial institutions on Tuesday that handling cryptocurrency exposes them to a range of risks, including fraud and fraud.
“The events of the past year have been marked by significant volatility and exposed vulnerabilities in the crypto asset sector,” the regulators said in a statement. Joint statement from the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The comments came just a few weeks later The spectacular collapse of the crypto exchange FTX.
Regulators said the risks include: “fraud and fraud among participants in the crypto asset sector” and “risk of contagion in the crypto-asset sector due to the connection between the crypto-assets sector” certain crypto asset participants.”
During the crypto boom, when the financial players seemed to announce a new solution Cryptocurrency partnership on a weekly basis, bank executives say they need more guidance from regulators before dealing more directly with bitcoin and other cryptocurrencies in retail trade businesses and the organization.
Now, about two months after FTX’s bankruptcy filingThe industry has been exposed to be rife with poor risk management, interconnected risks and blatant 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, but they seem to have given clues as to their direction.
“Based on the agencies’ current understanding and experience to date, the authorities believe that the issuance or holding as a primary crypto asset is issued, stored or transferred on the open network , public and/or decentralized or similar system is highly likely to be unsuitable for safe and sound banking practices,” the regulators said.
They also said that they have “significant safety and health concerns” with banks that focus on crypto customers or have “concentrated exposure” to the sector.
Traditional banks have largely ignored Cryptocurrency Crisis, unlike the 2008 financial crisis in which they played a central role. An exception has been made Silvergate Capital, have shares already battered in the past year.
