Regulators in the U.S. have issued the first joint warning to banks about the risks posed by %Cryptocurrencies.
In a joint statement, the U.S. Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency said they are closely monitoring the cryptocurrency activities of American banks.
The regulators also warned banks to be wary of fraud, illegal activity, and misleading disclosures made by cryptocurrency exchanges and lenders.
The warning comes two months after the collapse of crypto trading platform %FTX, which has sent shockwaves throughout the global industry.
The U.S. regulators also said that issuing or holding cryptocurrencies was “highly likely to be inconsistent with safe and sound banking practices.”
The joint statement from the American watchdogs comes after months of hesitancy by the U.S. financial industry to issue uniform guidelines on cryptocurrencies.
On the same day that regulators issued their warning to banks, FTX’s former chief executive officer (CEO), Sam Bankman-Fried, officially entered a not guilty plea to charges that he committed fraud.
Bankman-Fried pleaded not guilty in a New York court to claims that he took customer deposits at FTX to fund his other firm, hedge fund Alameda Research, buy property and make political contributions.