Fed member Christopher Waller on Friday cryptocurrency He issued a series of warnings to those interested in their assets, telling buyers that they could lose their investments, while telling banks that they should protect themselves against malicious industry representatives and risks to the financial system.
Cryptocurrency industry has suffered huge losses in recent months, bitcoin stock exchanges, credit institutions and payment platforms, and a criminal case against FTX founder Sam Bankman-Fried.
U.S. regulators, including the U.S. central bank, have told banks they should be more careful about the risk of fraud.
Waller Warns Crypto Investors and Industry Interested Institutions
Speaking at a conference held at the Global Interdependence Center, Waller said that so far, repercussions on the overall financial system have been “minimal,” and it is critical that regulators mitigate financial stability risks associated with stress in the crypto industry.
At the same time, he said banks considering dealing with crypto should meet “know your customer (KYC)” and anti-money laundering requirements, and ensure that they are monitoring customers’ business models and risk management systems so that the bank will not be “in trouble” in the event of a crypto collapse.
Waller had an even harsher warning to cryptocurrency traders: cryptocurrencies are risky as assets with no real value.
“If people want to own such an asset, then go ahead,” Waller said. “However, if you buy a crypto asset and the price hits zero at some point, please don’t be surprised and don’t expect taxpayers to cover your losses.”
*Not investment advice.
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