Banking authorities in the United States remain suspicious of institutions that handle digital assets. The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued a joint statement reminding banks of their safety and soundness requirements and highlighting concerns in the cryptocurrency industry.
Though the statement said that banks are not forbidden from doing business with enterprises that follow the law, the authorities highlighted many warning flags for anyone looking to become further involved in crypto-related operations.
The list emphasized issues like the possibility of scams, frauds, and misleading activities, as well as the vulnerability of stablecoins to bank runs. Concerns raised by the statement include undetermined redemption rights and unknown custody policies at crypto firms.
After FTX’s high-profile collapse, which was precipitated by a run on the exchange’s utility token FTT, which Alameda Research, the cryptocurrency exchange’s closely-affiliated investment fund, used as collateral for loans, bank partnerships with crypto businesses have come under increased scrutiny.
Silvergate Bank in California, which conducts major business with stablecoin issuers and counts FTX as a customer, has gotten special attention, as has Moonstone Bank in Washington state, which received investment from Alameda Research.