Financial Shares Rise as Cryptocurrencies Remain in Focus — Financials Roundup

Shares of banks and other financial institutions were higher as investors continued to focus on cryptocurrencies.

Tumult in the cryptocurrency market represents a red flag to the broader financial system, the Federal Reserve’s top banking regulator told lawmakers, while pressing for tougher guardrails in the wake of the rapid collapse of crypto exchange FTX.

Michael Barr, the Fed’s vice chairman for supervision, said crypto-related activities need to be regulated in a manner similar to more traditional financial-services providers.

Cryptocurrency lender BlockFi is preparing a potential bankruptcy filing after halting withdrawals of customer deposits and acknowledging it has “significant exposure” to bankrupt exchange FTX, people familiar with the matter said. BlockFi paused withdrawals and limited activity on its platform last week, saying it couldn’t operate business as usual given the uncertainty about FTX.

BlockFi is now planning to lay off some of its workers while the troubled firm prepares for a possible chapter 11 itself, people familiar with the matter said.

Meanwhile, FTX Trading said in court papers that it has been in contact with the U.S. Attorney’s Office and dozens of federal, state and international regulatory agencies, and that up to a million customers may be affected by its sudden collapse into bankruptcy.

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(END) Dow Jones Newswires

11-15-22 1710ET