The top U.S. financial regulators are worried about the prospect of deeper ties between digital-asset firms and Wall Street.
The Financial Stability Oversight Council said Friday that interconnections between crypto firms and traditional financial institutions remain limited. However, entanglements could rapidly increase and put the broader system at risk, they warned in an annual report.
U.S. officials have long been concerned about looming threats from the digital-asset industry much of which operates in regulatory gray areas. The issues have been underscored this year amid market turmoil, the bankruptcy of crypto lenders, and, most recently, the collapse of the exchange giant FTX.
