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Financial Services Law Insights and Observations

Yellen cites crypto market risks

Federal Issues Digital Assets Department of Treasury Cryptocurrency Fintech

Federal Issues

On November 16, Treasury Secretary Janet Yellen issued a statement addressing recent crypto market developments. “The recent failure of a major cryptocurrency exchange and the unfortunate impact that has resulted for holders and investors of crypto assets demonstrate the need for more effective oversight of cryptocurrency markets,” Yellen said, stressing that existing regulations must be rigorously enforced against those who operate in the crypto-asset space. Acknowledging recent actions taken by federal regulators to address crypto risks in response to President Biden’s Executive Order on Digital Assets (covered by InfoBytes here), Yellen cautioned that it is imperative for the federal government, including Congress, to move quickly to address regulatory gaps in this space. She warned that while spillovers from recent events in the crypto markets “have been limited,” the interconnections between the traditional financial system and the crypto markets “could raise broader financial stability concerns.”

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