The Financial Stability Board (FSB) is sounding the alarm on growing risks from the crypto sector, warning that interlinkages with traditional finance are nearing a critical threshold.

Speaking in Madrid on Thursday, outgoing FSB Chair Klaas Knot said that while crypto does not yet pose a systemic risk to traditional finance, that status may not last much longer. “We may be approaching a tipping point here,” he said.

Knot noted that entry barriers for retail investors have “dropped significantly,” particularly with the introduction of crypto exchange-traded funds. Crypto ETFs allow investors to gain exposure to digital assets without managing private keys, using crypto wallets or navigating exchanges.

Knot added that another area…