Just two months after the collapse of the FTX trading platform caused a wide shock in the cryptocurrency industry, US regulators issued the first-ever joint warning to banks about the risks associated with the cryptocurrency market.

Regulators have asked financial institutions to be vigilant against possible fraud, legal misinformation and misleading statements by digital asset companies.

In the joint statement, the US central bank, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the currency said that they are closely monitoring the crypto activities of banking organizations.

"The events of the past year were marked by significant volatility and exposure of vulnerabilities in the crypto asset sector,"the statement said.

The regulators also said that the issuance or holding of cryptocurrencies, which are stored on public decentralized networks, "is very likely incompatible with safe and sound banking practices".

Regulators have also urged banks to take steps to avoid problems in the digital asset market spreading to the wider financial system.

"It is important that risks related to the crypto asset sector that cannot be mitigated or controlled are not transferred to the banking system,"they added.

The statement comes after months of reluctance by US financial industry regulators to issue uniform guidance on cryptocurrencies, despite banks calling for clearer advice from regulators.

The cryptocurrency industry was affected by the collapse of the FTX Stock Exchange in November.

FTX was the second largest cryptocurrency exchange in the world and the entry point for millions of people to the digital asset market.

And on Tuesday, the former CEO of FTX Sam Bankman fried officially denied accusations that he defrauded clients and investors.

He pleaded not guilty in a US court to allegations that he took customer deposits at FTX to fund his other company, Alameda research, to buy property and to make political donations.

Two of Bankman fried's closest colleagues have already pleaded guilty and are cooperating with the investigation, which has shaken the entire cryptocurrency industry.

Bankman Fried is one of the most prominent figures in the sector, known for his political connections, celebrity endorsements, and bailouts of other struggling companies.

The United States has accused him of building a "house of cards on the basis of deception, while telling investors that it is one of the safest buildings in cryptocurrencies".