Federal Reserve Governor Christopher Waller issued a warning on Friday about the risks of cryptocurrencies, saying they are “no more than a speculative asset, like a baseball card.”
“If you buy cryptoassets and the price goes to zero at some point, please don’t be surprised and don’t expect the taxpayers to socialize your losses,” Waller said in a speech at a conference held by the Global Interdependence Center on Friday.
Wall…
Federal Reserve Governor Christopher Waller issued a warning on Friday about the risks of cryptocurrencies, saying they are “no more than a speculative asset, like a baseball card.”
“If you buy cryptoassets and the price goes to zero at some point, please don’t be surprised and don’t expect the taxpayers to socialize your losses,” Waller said in a speech at a conference held by the Global Interdependence Center on Friday.
Waller made the comments as regulators begin to take more steps to increase oversight of the crypto market, after a number of major companies collapsed in recent months, resulting in billions of dollars in customer losses and shaking the nascent industry.
Waller compared cryptocurrencies to baseball cards and celebrity autographs, saying they have little or no intrinsic value, with prices depending solely on demand for them.
“If people believe that others will buy it (a crypto) from them in the future at a positive price, it will trade at a positive price today. If not, the price will go to zero,” Waller said. “If people want an asset like that, go for it. I wouldn’t do it, but I don’t collect baseball cards either.”
Bitcoin
BTCUSD
lost 1.4% in the last 24 hours to around $21,589 on Friday. It’s up more than 30% so far this year, but is still down nearly 70% from its all-time high.
Waller also said that banks engaging with crypto clients should exercise caution to ensure they “don’t get left in the bag” if there is more meltdown in the crypto industry.
Such comments followed a series of actions by various regulators targeting crypto companies. On Thursday, the US Securities and Exchange Commission accused crypto exchange Kraken of failing to register its betting program as securities. Kraken has ended the program for US customers and agreed to pay $30 million to settle the allegations, without admitting or denying the allegations.
Read: Crypto industry fears betting ban, as some turn to bitcoin: ‘It’s always been on the safe side of regulation’
Meanwhile, the New York Department of Financial Services is reportedly investigating stablecoin issuer Paxos, according to a report from CoinDesk on Thursday. The scope of the investigation remains unclear.
Paxos did not respond to a request for comment. The NYDFS said it cannot comment on any ongoing investigations.
