SECs Crypto Retreat Could Spark 2008-Style Crisis, Experts Warn
The pair argue that by easing oversight on digital asset markets, while banks simultaneously expand into token-related services, regulators may be enabling hidden risks to build up across the financial systemmuch like the lead-up to the 2008 crisis.
Stark and Reiners point out that the weakening of crypto-specific enforcement efforts has blurred the line between speculative digital assets and federally regulated banking activity. As token platforms and lenders gain more access to traditional financial infrastructure, they say the result could be systemic risk without the necessary guardrails.
According to the essay, these new linkages remain largely untested and could collapse under economic stress, threatening broader financial stability.
Reversal of Hard-Won Safeguards?
The authors describe the SECs current direction as dismantling hard-won legal and regulatory separations designed to insulate traditional banking from risky, unregulated financial products.
They argue that without strong enforcement and clearer oversight, the expanding influence of crypto in mainstream finance may be laying the groundwork for a new and dangerous era.
Their call comes amid broader debates about how digital assets should be regulatedand who should be responsible for keeping them in check.
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