- The Federal Reserve, FDIC, and OCC published a statement to alert banks about crypto risks.
- The statement claimed significant volatility and the absence of governance mechanisms as a big risk in the crypto sector.
- The agencies will be monitoring banks engaging in crypto activities.
The Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) jointly publish a statement concerning crypto-asset-related risks for banking organizations.
In light of increased volatility in the cryptocurrency sector in 2022, the agencies have released a list of risks that banks should be aware of before dealing with digital commodities. These included risks of fraud and scams among crypto-asset sector participants, alongside legal uncertainties related to custody practices, redemptions, and ownership rights.
The listicle further establishes inaccurate or misleading representations and disclosures by crypto-asset companies, including misrepresentations regarding federal deposit insurance, and other practices a risk, and harmful to retail and institutional investors, customers, and counterparties.
Significant volatility, lack of governance mechanisms establishing oversight of the system, and the absence of contracts or standards to clearly establi ...
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