US Treasury Secretary Janet Yellen Says Crypto Markets Need More ‘Effective Oversight’ Following FTX Implosion

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US Treasury Secretary Janet Yellen. Source: A video screenshot, Youtube/Credit Suisse

In form of fall down Major exchange FTX continues to fuel a bearish mood throughout the cryptosphere, with US Treasury Secretary Janet Yellen calling for the introduction of tighter regulations for the crypto industry.

“The recent failure of a major cryptocurrency exchange and the unfortunate implications for holders and investors of crypto assets demonstrates the need for more effective oversight of cryptocurrency markets,” the official said in a statement. Statement,

Yellen said that her agency and other US regulators had identified several risks within crypto markets over the past year, and these observations were included in a report released under the auspices of the US Presidential Working Group on Financial Markets.

“Some of the risks we identified in these reports, including lack of access to client assets, lack of transparency, and conflicts of interest, were at the center of crypto market tensions last week,” said Yellen, who serves as chair. were in.” In the years 2014 to 2018, the country’s central bank Federal Reserve (FED).

“We have very strong investor and consumer protection laws for most of our financial products and markets that are designed to address these risks,” the secretary said. “Where existing regulations apply, they should be strictly enforced so that the same protections and principles apply to crypto assets and services.”

The official concluded that the government, including Congress, “must move quickly to fill regulatory gaps” even though “in terms of financial stability, spillover from events in crypto markets has been limited.”

Following the collapse of FTX, some market observers are concerned about the risk of a potentially widespread infection spreading across the crypto ecosystem. However, there is also hope that some major players could benefit from the ongoing slowdown leading to more market consolidation, according to Joseph Ayyub, an analyst at international financial industry player Citi.

“I think it’s a double-edged sword,” Ayub Told In a recent interview. “I think, first of all, you obviously have the issue that volume and interest and volatility are going to go down in the space, which is obviously a huge negative for these companies that are dealing in cryptocurrency.”

At the same time, the ongoing market woes “present an opportunity for other exchanges to potentially take a larger share of the market as the second largest derivatives and spot exchange has filed for Chapter 11,” the analyst said.

“Within cryptocurrencies, it is unclear how far and how deep this goes. The contagion could last for quite some time,” he concluded.

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