Federal Reserve Gov. Christopher Waller on Friday fired off a warning about the risks of cryptocurrencies, saying they are “nothing more than a speculative asset, like a baseball card.”
“If you buy crypto-assets and the price goes to zero at some point, please don’t be surprised and don’t expect 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 actions to increase the supervision 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 fledgling industry.
Waller likened cryptocurrencies to baseball cards and celebrity autographs, saying they have little-to-no intrinsic value, with prices solely depending on demand for them.
“If people believe others will buy it (a crypto) from them in the future at a positive price, then it will trade at a positive price today. If not, its price will go to zero,” Waller said. “If people want to hold such an asset, then go for it. I wouldn’t do it, but I don’t collect baseball cards, either.”
Bitcoin BTCUSD, +0.73% lost 1.4% over the past 24 hours to around $21,589 Friday. It rallied more than 30% so far this year, but is still down almost 70% from its all-time high.
Waller also said banks that engage with crypto customers should practice caution to make sure they are “not left holding the bag” if there is more of a meltdown in the crypto industry.
Such comments followed a string of actions by different regulators targeting crypto companies. On Thursday, the U.S. Securities and Exchange Commission charged crypto exchange Kraken with failing to register its staking program as securities. Kraken has ended the program for U.S. customers and agreed to pay $30 million to settle the charges, without admitting or denying the allegations.
Read: Crypto industry fears a staking ban, as some turn to bitcoin: ‘It has 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 by CoinDesk Thursday. The scope of the investigation remains unclear.
Paxos didn’t respond to a request for comment. The NYDFS said it can’t comment on any ongoing investigations.
This article was originally published by Marketwatch.com. Read the original article here.