According to Sherrod Brown, chair of the Senate Banking Committee, the recent upheaval in cryptocurrency presents a picture of an ecosystem that might destabilise the international financial system.

The US legislator claims that almost all illicit activities, including outright theft and fraud, have exploited cryptocurrency.

He said it would be "the last thing" anyone would want to witness if the new financial instrument caused the financial system to collapse.

Red signs include the FTX collapse.

Following the collapse of significant crypto exchange FTX, his remarks at a hearing with top US financial authorities come at a time when cryptocurrency is once again in the spotlight.

Sam Bankman-Fried, a Capitol Hill favourite before his "empire's downfall," created the business.

However, following the collapse of FTX and allegations that Alameda Research misappropriated customer funds, there has already been a rise in activity in Washington and other areas.

He stated during the committee hearing that "the parallels to other financial disasters throughout our history are disturbing," according to statements made by The Block. The lawmaker, who has previously criticised cryptocurrencies, proceeded to express concern that "hundreds of speculative cryptocurrencies" don't offer anything that is "useful."

Regarding the outlook on both sides of the legislative aisle, Brown stated:

Many people on my side of the aisle have expressed concern about this. The last thing our financial system needs is for dangerous new financial products to collapse. Thank you to the panellists for being sceptical of cryptocurrency.