Senators Warren and Smith call on Fed to account for banks’ crypto ties | WKZO | All Kalamazoo

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(Reuters) U.S. Senators Elizabeth Warren and Tina Smith are calling on the Federal Reserve and other U.S. financial regulators to report on banks’ cryptocurrency activity and industry ties following the implosion of the FTX crypto exchange.

While the banking system has so far been relatively untouched by the latest crypto crash, the FTX crash shows that crypto may be more integrated into the banking system than regulators realize, lawmakers wrote to industry chiefs. the Fed, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency in letters dated Wednesday and released by Warrens’ office on Thursday.

We are writing to express our concern and ask how your agency assesses the risks to banks and the banking system associated with these relationships, wrote the senators, both Democrats on the Senate Banking Committee.

The letters asked for details about oversight of banks’ cryptocurrency exchanges and loans to crypto firms, and asked whether regulators planned to conduct a review of crypto firms’ relationships with banks. They gave regulators two weeks to respond to their demands.

Lawmakers have launched investigations into the cryptocurrency industry following the collapse of Bahamas-based FTX, which filed for bankruptcy last month after at least $1 billion in funds disappeared clients.

(Reporting by Ann Saphir; editing by Jonathan Oatis)

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