WASHINGTON, D.C.— Phillip Basil, Director of Banking Policy, issued the following statement in connection with the release of Better Markets’ Fact Sheet on FinTech, Crypto, the Banking Industry and Regulation.

“The recent rapid and spectacular collapse of the crypto company FTX has clearly shown – again – the fiction and lawlessness of the crypto industry. Fortunately, this crypto carnage has largely been kept out of the traditional banking and financial system due mostly to the financial regulatory agencies.  This is an example of the increasing bank-like activities of crypto and FinTech companies and the important role the banking regulatory agencies have in addressing the many novel risks they bring that threaten the system from the inside and out.

“There are some financial technologies designed to safely integrate into our financial system, while providing important consumer protections. This type of innovation should continue with the risks being appropriately addressed and managed consistent with the law. But there are also many current technologies that disregard or are designed to circumvent regulations and consumer protections. These technologies are a threat to financial stability, undermine consumer protections, and must be kept out of the traditional financial system.

“The banking regulatory agencies have a duty to address the complicated, interrelated challenges of these technologies with an analytic framework that strikes the right balance between enabling the real benefits of each technology to be realized, if indeed there are any, while simultaneously minimizing the downside risks. Current supervision and regulation frameworks may apply, but where they fail to address the novel risks presented by these technologies, the agencies must put in place specific frameworks for the safety of our financial system and benefit of the American people.”

You can find the Fact Sheet here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.