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The cryptocurrency market needs more regulation as the recent fall of an industry stalwart demonstrated the "weaknesses of this entire sector," US Treasury Secretary Janet Yellen told Bloomberg in an interview.
Yellen noted that in other regulated exchanges, businesses are obliged to segregate customer's funds. She said:
"The notion you could use the deposits of customers of an exchange and lend them to a separate enterprise that you control to do leveraged, risky investments — that wouldn't be something that's allowed."
Yellen emphasized said that US regulators managed to contain financial risks exposed by the crypto market. She hinted that crypto-related businesses should not expect any regulatory easing in the foreseeable future as by accessing banking sector crypto would "pose broader threats to financial stability."
Yellen's comments come after FTX filed for Chapter 11 bankruptcy in the US as the platform reportedly owes its users around $10 billion. Approximately 130 firms affiliated with FTX are part of the proceedings in the proceedings. FTX Australia and LedgerX were not included in the case.
