The Financial Stability Oversight Council (FSOC) released its 2022 Annual Report following approval by its voting members on December 16, 2022. According to the report, digital assets were amongst the vulnerabilities identified within the United States (U.S.) financial system.

The FSOC 2022 Annual Report identified gaps in the regulation of crypto-asset activities within the U.S. and made recommendations to address the gaps.

The first gap that the annual report noted was that the spot markets for crypto-assets that are not securities were subject to limited direct federal regulation. 

The second gap identified was that crypto-asset market businesses did not have a consistent or comprehensive regulatory framework and could engage in regulatory arbitrage. 

The third gap identified was that a number of crypto-asset trading platforms have proposed offering retail customers direct access to markets by vertically integrating the services provided by intermediaries such as broker-dealers or futures commission merchants. 

Finally, the Council recommended that Council members continue to build capacities related to data and the analysis, monitoring, supervision, and regulation of crypto-asset activities.