WASHINGTON–Treasury Secretary Janet Yellen has issued a statement saying there is a need for more effective oversight of the cryptocurrency market in order to promote financial stability.
The statement came in the wake of the recent failure of FTX, the major exchange of the digital assets.
In the statement, Yellen referenced the “unfortunate impact” for holders and investors of crypto assets, and noted the U.S. has strong investor and consumer protection laws for most financial products and markets that are designed to address the risks.
But those protections don’t exist everywhere, she pointed out, saying Congress, “needs to move quickly to fill the regulatory gaps” on crypto assets as earlier outlined in an executive order issued by President Joe Biden in 2021.
“In terms of financial stability, spillovers from the events in crypto markets have been limited, but a recent report by the Financial Stability Oversight Council, which Treasury chairs, warned that further interconnections of the traditional financial system and crypto markets could raise broader financial stability concerns,” Yellen said in the statement. “Going forward, it’s vital we do what is necessary to address these concerning risks and act to protect consumers and promote financial stability.”