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Atlanta Federal Reserve warns banks of risks associated with cryptocurrencies.

The warnings cover issues related to regulatory oversight, cyber security, as well as risks to bank customers who may be exposed to fraud and loss of funds.

Date: 2024-02-27 Author: Marek Stiller
Atlanta Federal Reserve warns banks of risks associated with cryptocurrencies.

TheFederal Reserve Bank of Atlanta has issued a warning over the dangers of blockchain and cryptocurrencies. The Atlanta Fed released a statement Monday advising banks and financial service providers to exercise caution when dealing with cryptocurrencies.

The report said banking organizations and their service providers should have systems in place to identify, monitor and control risks. The Fed said banking regulators should simultaneously ensure the safety and soundness of cooperative credit unions and banks.

“A banking organization can have many relationships, and any new partnership, if not properly managed, can introduce risk.”

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What’s more, the institution stressed that banks that have complex payment systems, crypto or blockchain activities must comply with the new supervision program to make sure the new regulations are enforced.

The program, announced in August 2023, aims to strengthen the Fed’s oversight of innovative cryptocurrency and distributed ledger technology(DLT) activities by banking organizations.

The warning comes at a time when cryptocurrencies are becoming an increasingly popular tool used by organized crime groups to conduct illegal activities. According to a recent report by Immunefi, a major platform for error counting and security services, some $127 million in cryptocurrencies were stolen in 19 incidents by hackers and fraudsters.

This is a six-fold increase compared to losses in January 2023, which resulted from cryptocurrency fraud of $21,021,800. It is also 2.8 times the December 2023 losses of $45,369, 855.

In December, Atlanta police issued an urgent warning in the metro area after a series of reports of cryptocurrency fraud. At the time, federal authorities described it as a “pump and dump” operation, in which instigators inflate prices and encourage everyone to buy.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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