The U.S. agency that had once been the great hope of the cryptocurrency world is now issuing strong warnings to the industry that it's in danger of echoing the toxic culture before the 2008 financial crisis.
Michael Hsu, the acting chief of the Office of the Comptroller of the Currency (OCC), argued Tuesday that cryptocurrencies and decentralized finance (DeFi) may be evolving into threats to the financial system in much the same way certain derivatives brought it near collapse more than a decade ago. Notorious credit default swaps (CDSs) were engineered by math wizards in much the same way that crypto has emerged, he said.
"Crypto/DeFi today is on a path that looks similar to CDS in the early 2000s," Hsu told the Blockchain Association in a webcast. "Fortunately, this group has the power to change paths and avoid a crisis."
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
