Bank of England: Crypto crashes show need for tougher rules

The Bank of England warned on Tuesday that the recent crypto crash that wiped out more than $2 trillion in value underscores the need for tougher financial regulations.

The UK's central bank says the crashes that exposed holes in the cryptocurrency market are reminiscent of previous periods of financial turmoil.

The bank said in its latest Financial Stability Report, extreme volatility in the cryptocurrency market, including so-called stablecoins, has resulted in "out of stock" and sharp price drops.
While overall financial stability is not at stake, the bank fears that "systemic risk" will increase as cryptocurrencies become more entwined with the broader financial system, and calls for a "mold regulatory framework and improve law enforcement".
“Technology does not change the laws of economics, finance and risk,” said Jon Cunliffe, deputy governor for financial stability. “We now need to put in place a regulatory system that will manage these risks in the crypto world the same way we manage them in the regular world.”

Bitcoin and other cryptocurrencies have fallen this year, reducing the total value of cryptocurrencies from $3 trillion at its peak in late 2021 to $900 billion,..