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Wall Street Watchdog Cautions Banks on Trading Crypto Derivatives
OCC Acting Comptroller Michael Hsu said he's working with global regulators to find "a consistent, careful and cautious approach to bank involvement in crypto."
Updated May 11, 2023, 6:34 p.m. Published Mar 31, 2022, 8:41 p.m.
A key U.S. financial watchdog is warning banks not to get cozy with crypto derivatives, suggesting those that do will face extra regulatory scrutiny.
"Several large banks are exploring making markets for clients in bitcoin futures, with an eye towards trading forward [contracts] and other derivatives,” said Acting Comptroller Michael Hsu of the Office of the Comptroller of the Currency (OCC), in a virtual speech during an American Bankers Association conference on Thursday. “Before banks move too much farther down this path, they should carefully consider the tail risks of trading crypto derivatives."
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Hsu cited Goldman Sachs (GS) completing its first cryptocurrency-related, over-the-counter (OTC) trade with Galaxy Digital last week. The Wall Street giant and the digital-asset financial firm said the transaction demonstrates the "continued maturation and adoption of digital assets by banking institutions."
Hsu warned that crypto pricing is "limited or unreliable," so the type of models big lenders typically use to figure out risk could make them underestimate what they're facing. Hsu contends banks could end up without a big enough capital cushion.
He also wondered whether the lenders his agency oversees can properly hedge their risks if those hazards can't be measured.
Hsu said he's working with other global regulators to find "a consistent, careful and cautious approach to bank involvement in crypto."
The Basel Committee on Banking Supervision is already looking into the capital treatment for such crypto-related exposures at banks. Whatever that global standard-setter decides will influence the decisions made by its member governments, including the U.S.
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What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
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Consumer Groups Join Unions Trying to Derail U.S. Crypto Market Structure Bill
Political progressives have joined forces to oppose current versions of the industry-backed legislative effort in the Senate.
What to know:
- Consumer advocates are jumping in with unions to push back on the crypto market structure bill making its way through the U.S. Senate.
- They're saying it poses dangers to people's finances and the stability of the U.S. economy.
- Senators have been working toward a markup of the legislation in the Senate Banking Committee as soon as next week, though some expect the date to slip beyond the holidays.
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