- Regulator releases joint statement with FDIC and OCC
- The parties urged banks to refuse transactions with crypto companies
- Allegedly, they entail an increased risk of a liquidity crisis.
Yesterday, February 23, the Fed published statement, which reminded banks of the risks of cryptocurrency transactions. Allegedly, the unpredictability of cash flows in this industry can serve as an impetus for a liquidity crisis.
The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) also joined in the warning. Bureaucratic frills aside, the authorities are urging banks not to do business with cryptocurrency companies.
“Some sources of financing from CA-related counterparties carry an increased liquidity risk for banks due to the unpredictability of the outflow and receipt of deposits” the Fed said in a statement.
As an example, the regulator cites the collapse of Terra-Luna. During this period of “stress and panic”, many third-party companies associated with Terraform Labs financial flows suffered.
“The stability of such deposits is directly related to the demand for stablecoins, the trust of holders and the practice of reserve management” – notes the Fed.
The authorities have not forgotten about the Voyager scandal. Recall that the cryptolender deceived its clients, assuring that their deposits are insured by the FDIC. In its statement, the Fed advised banks not to deal with counterparties seen in this.
