© Reuters.
Investing.com – After the recent cryptocurrency market shock following the fall of cryptocurrency exchange FTX, thousands of investors in the US and abroad have lost much of their money and investments.
The US Treasury’s remarks largely reflect concerns expressed by banking regulators in the two-day congressional hearings.
“The recent cryptocurrency exchange fiasco, and the unfortunate impact it has had on digital asset holders and investors, demonstrates the need for more effective oversight of the markets,” the Treasury Department said in a statement, without directly naming FTX. .
The Treasury and other regulators have identified risks in cryptocurrency markets over the past year, including “combination of client assets, lack of transparency and conflicts of interest,” which were “at the heart of the cryptocurrency market stresses observed in the last week .”
Official statement
“The recent bankruptcy of a major cryptocurrency exchange and the unfortunate impact it has had on digital asset holders and investors demonstrates the need for more effective oversight of the cryptocurrency markets,” the US Treasury secretary said in the statement.
Over the past year, through the President’s Financial Markets Working Group and in response to the CEO’s order on digital assets, the Treasury Department has worked with its regulatory partners to identify risks in the cryptocurrency markets.
Some of the risks we identified in these reports, including access to client assets, lack of transparency and conflicts of interest, have been at the heart of the cryptocurrency market stresses seen over the past week.
fill the gaps
“We have very strong investor and consumer protection laws for most of our financial products and markets that are designed to address these risks,” the statement added.
“When existing regulations are enforced, they must be strictly enforced so that the same protections and principles apply to crypto assets and services,” he stressed.
“The federal government, including Congress, also needs to move quickly to close the regulatory gaps identified by the Biden administration,” he said.
financial stability
In terms of financial stability, the spillover effects of events in the cryptocurrency markets have been limited.
But a recent report by the Financial Stability Oversight Board, chaired by the Treasury Department, warned that increased interdependence between the traditional financial system and cryptocurrency markets could raise broader financial stability concerns.
Moving forward, it is imperative that we do what is necessary to address these related risks and act to protect consumers and promote financial stability.
