FTX’s Banking Web Raises Awkward Questions for Regulators (1)

The residue of Sam Bankman-Fried’s crypto empire is laying bare the industry’s growing foothold in the traditional banking system.

Although there is no indication that FTX’s spectacular collapse poses any systemic risk, its bankruptcy filings read like a warning label on what could go wrong. The disclosures also raise a pressing question for US regulators and lenders: Are they doing enough to keep tabs on the fast-growing sector?

Federal Reserve building in Washington

Photographer: Graeme Sloan/Bloomberg

Federal watchdogs have for months been warning banks to tread carefully with digital assets, and, for the most part, Wall Street has heeded that call. Some smaller ...