Financial Regulators Urge Congress to Pass Crypto Legislation in New Report FSOC’s latest release reiterates its suggestion from last year’s report demanding greater regulation of spot markets crypto assets classified
as non-securities and greater regulation of stablecoins overall. The report encapsulates
14 different economic vulnerabilities and “makes recommendations to further enhance the integrity, efficiency, and stability
of U.S. financial institutions and markets.” In regards to crypto,
FSOC noted a string of vulnerabilities, including “crypto-asset price volatility, the market’s high use of leverage, the level of interconnectedness
within the industry, operational risks, and the risk of runs on crypto-asset platforms and stablecoins.” Moreover,
FSOC alleges the crypto market is facing a number of potential vulnerabilities, including “token ownership concentration, cybersecurity risks, and the proliferation of platforms acting outside of or out of compliance with applicable laws and regulations.”
The release of FSOC’s report follows a turbulent year for the crypto industry wherein a number of key players faced regulatory consequences. In November, a jury found FTX founder Sam Bankman-Fried guilty
of fraud after an intensive month-long trial where the disgraced “king of crypto” testified on his own behalf.
