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Treasury Secretary Janet L. Yellen called the collapse of the cryptocurrency exchange FTX a “Lehman Moment,” referring to the investment bank that filed for bankruptcy in 2008.CreditCredit…Winnie Au for The New York Times

Treasury Secretary Janet L. Yellen said on Wednesday that the collapse of the cryptocurrency exchange FTX was a “Lehman moment” for the cryptocurrency industry, which she continues to view with skepticism.

Speaking at The New York Times DealBook summit, Ms. Yellen described cryptocurrencies as “very risky assets” and said she was thankful that their recent volatility had not spilled over into the mainstream banking sector. The comments came amid growing concerns about the risks of investing in digital assets and as lawmakers have been calling for more regulation of the industry.

“I have been skeptical, and I remain quite skeptical,” Ms. Yellen said.

The Biden administration over the last year has been studying the landscape of digital assets to develop a new regulatory framework.

The Treasury secretary praised banking regulators for having been careful when it came to cryptocurrencies.

“It’s a Lehman moment within crypto,” Ms. Yellen said, referring to the investment bank that filed for bankruptcy in 2008. “And crypto is big enough that we’ve had substantial harm of investors and particularly people who aren’t very well informed about the risks that they’re undertaking, and that’s a very bad thing.”

Ms. Yellen said it was important to be open to financial innovation, noting that technology that underlies cryptocurrencies has the potential to provide faster and cheaper transactions. However, she added, faster-cheaper functionality must be robust enough to provide sufficient consumer protections.

“I think everything we’ve lived through over the last couple of weeks, but earlier as well, says this is an industry that really needs to have adequate regulation, and it doesn’t,” Ms. Yellen said.

Ms. Yellen noted that she was surprised by the downfall of FTX and that she did not personally know Mr. Bankman-Fried.

“I’ve never met with him,” Ms. Yellen said. “I think I won’t begin right now, either.”

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