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The Office of the Comptroller of the Monetary Engineering (OCC), the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) released a joint declaration urging the Bank of America to be more cautious about encryption related risks.

The statement will be released two months after the collapse of the crypto trading center FTX, which has caused many shareholders unable to withdraw their assets.

Terra (LUNA), the data asset, Three Arrows Capital (3AC), and Celsius Network, the encryption enterprise, will also decline in 2022.

"The events of the past year were marked by the obvious ups and downs of the crypto asset industry and the exposure of system vulnerabilities. This event reflects some important risks related to crypto assets and crypto asset industry participants that financial institutions need to pay attention to."

Because the bankruptcy of large and medium-sized encryption enterprises reflects the major risks of the industry, the institution indicated that they will continue to treat the current and proposed encryption related theme activities and their bank risk exposure with caution.

"The most important thing is that the risks associated with the crypto asset industry that cannot be mitigated or controlled cannot be transferred to banking."

The Federal Reserve Meeting, OCC and FDIC also said that they had significant security and earnings management challenges with regard to the business operation model with cryptocurrency as the main content and the business operation model with centralized risk exposure to new asset types.

"Based on the experience accumulated so far from the understanding of the institution at this stage, the institution feels that it is likely that the sale, storage or migration of important encrypted assets in the same or the same system as the opening up, announcement and/or decentralization network may not conform to the trusted international practices of the banking industry."

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