FTX's previously unknown ties to the banking system have raised questions about crypto's reach in traditional finance.

Dianne Dobbeck, head of the Federal Reserve Bank of New York's supervision group, said the banking system is sound, but potentially destabilizing risks must be monitored and addressed.

Mystery continues to shroud the missing billions at the bankrupt crypto exchange FTX after its disgraced founder Sam Bankman-Fried denied trying to perpetrate a fraud while admitting to grievous managerial errors.

Federal Reserve Gov. Lisa Cook said recent events show that existing regulation and supervision tools are already well suited for safeguarding banks from the risks of digital assets.

Some respected financial industry participants had connections with the cryptocurrency exchange and are coping with the fallout alongside thousands of investors and backers.

LedgerX — one of the few corners of Sam Bankman-Fried's crumbled crypto empire that remain solvent — is preparing to make available $175 million for use in FTX's bankruptcy proceedings, according to people with knowledge of the matter.

In a letter to Treasury Secretary Janet Yellen, Sen. Sherrod Brown, D-Ohio, said regulators should have supervisory authority over crypto activity.

Revelations about the failed cryptocurrency exchange FTX's inroads into the banking system raise important questions about how limited the crypto crash really is.

The bankrupt cryptocurrency lender BlockFi will try to collect about $680 million it is owed by a part of Sam Bankman-Fried's failed crypto empire, a lawyer told the federal judge overseeing BlockFi's insolvency case.

Advisors overseeing the group's ruins have more broadly pointed to a potential commingling of digital assets, raising concerns about misuse of customer funds and making ties between the two firms a likely focus for regulators and investigators probing the collapse.