By Pam Martens and Russ Martens: January 4, 2023
After multiple federally-insured banks involved with crypto have watched their publicly-traded stocks crater in price over the past year (see above chart); after a former Fed insider blew the whistle on what’s been going down as a result of the Fed’s hands off approach to policing crypto banks; after alleged fraudster operation, FTX, quietly bought a large stake in a federally-insured bank in the state of Washington; and after Senators Elizabeth Warren and Tina Smith sent a blistering demand for answers to the Fed, FDIC, and OCC on December 7 – those three federal agencies issued a new warning to banks yesterday on what life in the crypto lane could mean to their future.
The warnings included the following:
“The events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector. These events highlight a number of key risks associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of, including: