Last week, there was a lot of regulatory talk about crypto-related risks. While this is very common in itself, some angles and proposed solutions to such risks came across as novel. In the United States, the Federal Deposit Insurance Corporation (FDIC) issued a letter to commercial and savings banks under its purview, or all federally chartered banks, asking financial institutions to notify the FDIC about all ongoing and planned crypto-related activities. Apparently, standardized guidance for all banks would not fit the bill since the risks seem to be unique in each case.
In Singapore, the local monetary authority became concerned about the “reputational risks” that virtual asset service providers that have originated in the city-state but operate overseas can pose. The proposed solution is bringing such firms under the Singaporean licensing regime that, until now, applied only to firms with domestic operations.
Finally, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler — one of the most vigilant guardians of the nation’s investor folk – spoke about how retail crypto investors must be protected. Embedded within the usual talking points that were previously unheard of calls for the SEC staff to explore ways of regulating platforms that facilitate the trading of both securities and non-securities, including closer coordination with the Commodity Futures Trading Commission (CFTC). At the same time, other crypto-related fears have begun to dissipate, best exemplified by the “Russia sanctions evasion” narrative taking a major hit.