Federal Reserve’s top banking regulator is asking Congress to adopt legislation to regulate crypto currencies. swift collapse last week FTX, a major crypto exchange.

Michael Barr, the Fed’s vice chair for supervision, said in prepared testimony released Monday that “recent events in crypto … have highlighted the risks to investors and consumers associated with new and novel asset classes and activities when not accompanied by strong guardrails.”

Barr, who assumed office in July and is scheduled to testify before Congress on Tuesday as vice chair. In his written remarks, he didn’t mention FTX.

His appearance is made after FTX, which was formerly managed by Sam Bankman Fried. filed for bankruptcy Friday. The crypto world has been affected by the fall of FTX, with BlockFi stopping customer withdrawals.

Barr “some financial innovations offer opportunities, but as we have recently seen, many innovations also carry risks.” These include run on deposits and collapsing asset value, misuse of customer funds as well fraud, theft, manipulation and money laundering.

“These risks, if not well controlled, can harm retail investors and cut against the goals of a safe and fair financial system,” Barr stated.

Barr observed that the collapse of FTX took place outside of the banking system. This was a key area of his oversight.

“But recent events remind us of the potential for systemic risk if interlinkages develop between the crypto system that exists today and the traditional financial system,” He stated.

Barr stated that the vast majority of large banks have healthy cash reserves. This is in addition to what regulation requires.

But the economy is slowing down the Fed rapidly lifts interest rates, He said that banks could be subject to more stress.

The “economic outlook has weakened,” Barr spoke out in support of increasing uncertainty “A weaker economy could put stress on households and businesses and, thus, on the banking system as a whole.”

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