After the recent shock to the cryptocurrency market after the fall of the cryptocurrency exchange FTX, thousands of investors in the United States and abroad have lost a lot of their money and investment.
The US Treasury’s remarks largely reflect the concerns expressed by banking regulators in the two-day congressional hearings.
“The recent fiasco of a cryptocurrency exchange, and the unfortunate impact this has had on digital asset holders and investors, demonstrate the need for more effective oversight of the crypto markets,” the Treasury said in a statement, without naming FTX directly.
Treasury and other regulators have identified risks in the cryptocurrency markets over the past year, including “client asset mix-ups, lack of transparency, and conflicts of interest,” which have been “at the heart of crypto market stresses observed over the past week.”
Official statement
“The recent failure of a major cryptocurrency exchange and the unfortunate impact this has had on digital asset holders and investors demonstrate the need for more effective oversight of crypto markets,” the US Treasury Secretary said in the statement.
Over the past year, through the President’s Working Group on Financial Markets and in response to the CEO’s order on digital assets, the Treasury Department has worked with its regulatory partners to identify risks in crypto markets.
Some of the risks we identified in these reports, including client asset access, lack of transparency, and conflicts of interest, have been at the heart of the crypto market pressures observed over the past week.
fill the gaps
“We have very strong investor and consumer protection laws for most of our products and financial markets designed to address these risks,” the statement added.
“When applying existing regulations, they must be strictly enforced so that the same protections and principles apply to crypto assets and services,” he emphasized.
“The federal government, including Congress, also needs to move quickly to close the regulatory loopholes 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 from the Financial Stability Oversight Board, which is chaired by the Treasury Department, warned that more interconnection 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 related risks and act to protect consumers and promote financial stability.
