Financial intermediaries are reportedly able to handle risk management for new crypto users, but cannot entirely remove it, with regulations to provide the key to emerging financial offerings to the public.

Specifically, the remarks were reportedly made by Christopher Waller – the United States Federal Reserve Board Governor – during his speech at the SNB-CIF Conference on Cryptoassets and Financial Innovation in Zurich, Switzerland.

The banking official reportedly referred to instances that took place in the past, in an attempt to demonstrate the relationship between technical innovation, regulation, and the amassing of fortunes.

“New technology – and a lack of clear rules – meant some new fortunes were made, even as others were lost,” Waller additionally claimed.

Veteran investors will possess sufficient knowledge to navigate in unregulated marketplaces, which makes the appearance of regulation irrelevant, Waller continued. 

He mentioned details of a Fed survey conducted recently which generated insights revealing that even with the explosive crypto-assets in the past years, only 12% of adults in the US have crypto in their portfolios, and 99% of them hold it to make investments.

Intermediaries in the financial market may call for regulation due to the fact that new users who suffered from bad interactions with crypto could enter into disputes with them.

“When everyday investors start losing their life savings, for no reason except wanting to participate in a hot market, demands for collective action can mount quickly.” Waller provided further explanation. 

Those demands can develop into the socialization of individual losses, nominally calling for the reimbursement of small investors who have been affected by the fall of the Terra (LUNC; formerly, LUNA) ecosystem, which, in turn, resulted in a surge in demand for regulation to steer clear from the reoccurrence possibility of the incident.