An official US statement on the collapse of the cryptocurrency market.. a violent attack by Investing.com
Investing.com – Thousands of investors in the United States and abroad have lost much of their money and investments following the recent shock to the cryptocurrency market following the collapse of cryptocurrency exchange FTX.
The US Treasury Department’s comments broadly mirror concerns expressed by banking regulators at the two-day congressional hearings.
“The recent fiasco of a cryptocurrency exchange and the unfortunate impact it has had on holders and investors of digital assets demonstrates the need for more effective surveillance of the markets,” the Treasury Department said in a statement, without naming FTX directly.
The Treasury Department and other regulators have identified risks in cryptocurrency markets over the past year, including “commingling of client assets, lack of transparency and conflicts of interest” that “have been at the heart of cryptocurrency market tensions observed over the past week. ”
“The recent failure of a major cryptocurrency exchange and the unfortunate impact it has had on holders and investors of digital assets demonstrates the need for more effective oversight of cryptocurrency markets,” the US Treasury Secretary said in the statement.
Over the past year, the Treasury Department has been working with its regulatory partners to identify risks in crypto markets through the President’s Working Group on Financial Markets and in response to the CEO’s executive order on digital assets.
Some of the risks we identified in these reports, including access to client funds, lack of transparency and conflicts of interest, have been at the heart of tensions in the cryptocurrency market over the past week.
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“We have very strong investor and consumer protection laws for most of our financial products and markets designed to address these risks,” the statement added.
“If existing regulations are applied, they must be rigorously enforced so that the same protections and principles apply to crypto assets and services,” he stressed.
“The federal government, including Congress, must also act quickly to fill the regulatory gaps identified by the Biden administration,” he said.
In terms of financial stability, the spillover effects of events in the cryptocurrency markets have been limited.
However, a recent report by the Financial Stability Oversight Board, led by the Treasury Department, warned that greater interdependence between the traditional financial system and cryptocurrency markets could raise broader financial stability concerns.
Going forward, it is imperative that we do what is necessary to address these associated risks and act to protect consumers and promote financial stability.
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