Some cryptocurrency businessmen, researchers, commentators, and legislators are now more in agreement than ever about regulation because of the FTX scandal.
Is FTX collapsing crypto executives?
As the fallout from the FTX collapse continues to ripple across the sector, crypto executives and lawmakers are becoming more vocal in their requests for industry regulation.
Read more: Binance CEO Suggests That The Sector Needs More Clear Regulation
In the past 24 hours alone, Maxine Waters, the chair of the US House Financial Services Committee, and Christine Lagarde, the head of the European Central Bank (ECB), have advocated for regulation and oversight of cryptocurrencies in the European Union as an “essential requirement.”
According to The Financial Times, United States Senator Cynthia Lummis, who supports cryptocurrencies, said that the collapse of FTX should serve as a wake-up call for Congress on November 28.
The bipartisan law Lummis offered this year would have prevented the FTX collapse because authorities could determine if an exchange dropped below the threshold “Immediately,” she claimed in an interview at the Financial Times’ Crypto and Digital Assets Summit.
Why does regulatory enforcement take action?
She said that if those conditions had existed for FTX, they would have raised red flags and prompted regulatory enforcement actions and assessments by federal regulatory bodies.
In the meantime, Binance CEO Changpeng Zhao said at a live on-stage presentation at the University of Nicosia as part of a Binance Meetup Nicosia that he thinks regulation is a way to help the industry grow, “protect customers,” and punish people who break the law.
Why Stephanie Link says cryptocurrency is “Broken and meaningless.”?
Stephanie Link, a Chief Investment Strategist and Portfolio Manager at the investment firm Hightower Advisors, has also called for additional regulation, claiming that until there is legislation, cryptocurrency is “Broken and meaningless.”
Why do we continue to discuss crypto? Broken and Irrelevant. Until there is regulation.
— Stephanie Link (@Stephanie_Link) November 27, 2022
Tom Dunleavy, a senior research analyst at the crypto analytics company Messari, expressed a similar pro-regulation stance in a post on Twitter on November 28. He noted that greater regulation of cryptocurrency would open the door “for large flows” of new investors.
The biggest concern institutional investors have with investing in crypto is the uncertain regulatory environment
Clearer regulation paves the way for massive flows pic.twitter.com/2zBsi4AAXA
— Tom Dunleavy (@dunleavy89) November 28, 2022
The ambiguous regulatory framework, according to Dunleavy, is the main issue for institutional investors when considering a cryptocurrency investment.
The cryptocurrency analyst brought up the results of the 2022 Institutional Investor Digital Assets Outlook Survey, which Coinbase put on. The survey showed that just over half of the people thinking about investing in cryptocurrencies worried about the lack of regulation.
-
What’s JP Morgan stated?
Following the collapse of FTX, banking and financial services company JP Morgan stated in a note dated November 24 that it anticipates there will be increased urgency in putting in place a consistent structure.
The company claims that laws will probably be adopted from the conventional financial system, “thereby promoting a convergence of the crypto ecosystem towards the conventional financial system.”
