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U.S. banking regulators said on Tuesday banks should be aware of key risks associated with cryptocurrency, including legal uncertainties and inaccurate or misleading disclosures by digital asset firms.
Also read: Asset class scorecard: While gold sparkles, cryptos bleed
In their first joint statement on crypto, the Federal Reserve, Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency also said banks issuing or holding crypto tokens that are stored on a public, decentralised network are "highly likely" to be inconsistent with safe and sound banking practices.
Also read: Bitcoin projections fail as it ends down 60% in 2022
The regulators also said they have safety and soundness concerns with bank business models that have concentrated exposure to the crypto sector, or those that are highly concentrated in crypto-related activities.
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