June 28, 2018 / 9:20 AM / in 2 months

BoE tells banks and insuers to be wary of crypto assets

LONDON, June 28 (Reuters) - Banks and insurers should be wary of crypto-assets as they can be highly-volatile and vulnerable to fraud, the Bank of England said on Thursday.

Sam Woods, BoE Deputy Governor responsible for financial supervision, said the range of products and market participants related to crypto-assets has grown quickly.

“In their short history, crypto-assets have exhibited high price volatility and relative illiquidity,” Woods said in a letter to the chief executives of banks and insurers he regulates.

“Crypto-assets also raise concerns related to misconduct and market integrity – many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks.”

The BoE expects firms to inform their usual supervisory contact of any planned crypto-asset exposure or activity on an ad hoc basis, together with an assessment of the risks associated with the intended exposure.

Reporting by Andy Bruce and Huw Jones, editing by Sinead Cruise

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