Janet Yellen: FTX Collapse Reveals ‘Weak Spots’ in the Crypto Industry

The FTX incident showed that the cryptocurrency industry needs ‘very close regulation.’ This view was voiced by U.S. Treasury Secretary Janet Yellen, Bloomberg reports.

“This shows the weak spots across the entire sector,” she emphasised.

The Treasury chief added that the consequences of the collapse of Sam Bankman-Fried‘s empire could have been worse if the cryptocurrency market had been more tightly interwoven with the traditional financial system.

“At least, it is not as deeply integrated with our banking sector and at the moment does not pose more serious threats to financial stability,” Yellen said.

Earlier, U.S. Representative Brad Sherman accused crypto billionaires of lobbying in Washington to curb regulation of the digital-assets industry. He called for an investigation into the FTX crisis and reminded of the involvement of entities connected to Bankman-Fried in backing politicians.

As reported, on November 11 FTX Group filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Bankman-Fried stepped down as CEO.

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