Rob Nichols is the president and CEO of the American Bankers Association and Dennis Kelleher is president and CEO of Better Markets, a Washington-based nonprofit that promotes financial markets reform.    

The recent turmoil in the trillion-dollar crypto sector, including FTX’s sudden liquidity crisis and spectacular collapse, has updated the concept of a bank run — made famous in movies like “It’s a Wonderful Life” and “Mary Poppins.” But this time, the run hasn’t been on a bank at all.   

Instead, many crypto-asset customers had accounts at nonbank crypto firms. When they ran (that is, when they simultaneously rushed to make large-scale withdrawals), the customers found their withdrawals slowed and then frozen by the firms in a desperate attempt to remain solvent. Customers were forced to watch helplessly as their accounts plummeted to zero. This is very similar to what happened at nonbank financial firms during the 2008 financial crash and would have happened when the 2020 pandemic hit if the Fed had not acted so quickly.

The recent bankruptcies of crypto lenders Voyager and Celsius — and at the algorithmic stablecoin TerraUSD — make the risks of nonbanks painfully clear for the consumers who lost billions in uninsured crypto accounts and investors who have lost trillions of dollars. And now, the largely unregulated nonbank FTX, which had multiple crypto business activities spanning the globe, saw $6 billion in withdrawals in 72 hours and has collapsed…