Federal banking regulatory agencies in the United States raised the alarm Tuesday of “key risks” for banks associated with crypto assets and the crypto asset sector.

The Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued a joint statement.

The alert outlines “multiple risks,” as evidenced by significant volatility and vulnerabilities over the past year.

The agencies said they would take a cautious approach in relation to current and proposed crypto-asset-related activities and exposures at banking organizations.

They promised to continue to evaluate whether the activities are carried out in a safe, legally permissible manner and in compliance with applicable laws and regulations.

The agencies will “continue to closely monitor crypto asset-related exposures of banking organizations and, as warranted.” An additional statement will be issued later.

In July 2021, CoinMarketCap estimated that around $98 billion was wiped out of the entire cryptocurrency market in 24 hours.

Five months earlier, the Central Bank of Nigeria (CBN) ordered banks to stop carrying out cryptocurrency transactions, threatening to penalize defaulters.

In May 2021, the Chinese government threatened to negotiate with financial institutions that offer cryptocurrency services.

A joint statement from the regulators stated that the virtual currency has no real value, warning that the price can be manipulated.

In an interview with Fox Business after leaving office, former US President Donald Trump stated that Bitcoin was “a scam.”

“Bitcoin, it looks like a scam. I don’t like it because it’s another currency that competes against the dollar,” Trump said.