Calls for tighter regulatory controls erupted in cacophony last week as FTX and its sister company Alameda Research are believed to have lost money. Reaches eye-popping levels and threatens to swallow the wider crypto market.
Now, following the latest gathering of the industrialized nations of 20 (G20) in Indonesia, the leaders of participating nations called the need for international rules to govern the burgeoning bitcoin and crypto space “important.” , and needed to ease “financial stability.”
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G20 leaders, including US President Joe Biden, wrote, “It is critical to harness the benefits of innovation while raising public awareness of risks, enhancing regulatory outcomes and supporting a level playing field.” increase. statement It was posted on the White House website after a meeting in Bali, Indonesia, this week.
Last month, the Financial Stability Board (FSB), the global financial standard-setting body, Proposed Rules that subject crypto companies and markets to the same strict rules that govern traditional finance.
“We welcome the FSB’s proposed approach to establishing a comprehensive international framework for the regulation of cryptocurrency activities, based on the principle of ‘same activity, same risk, same regulation’,” said the G20 leaders. “Including the so-called crypto asset ecosystem [traditional currency-pegged] Stablecoins are closely monitored and are subject to rigorous regulation, supervision and oversight to mitigate potential risks to financial stability. ”
The Bahamas-based FTX exchange reportedly lent customer deposits to Alameda Research, a trading firm owned by former billionaire and founder Sam Bankman-Fried (SBF), resulting in an $8 billion loss. may suffer from
A gaping hole in FTX’s balance sheet sparked a wave of warnings from other cryptocurrency firms with FTX exposure, rushing to distance themselves from the bankrupt exchange.
U.S. Treasury Secretary Janet Yellen said the fall in FTX was[s] We need to monitor the cryptocurrency market more effectively,” he said in a statement this week, adding that the same protections offered in traditional markets should apply to cryptocurrencies.
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Cristiano Bellavitis, a professor at Syracuse University who specializes in cryptocurrency and blockchain technology, commented via email. “The sector is huge financially, but regulation is very limited. The same problem would not have arisen in the mainstream financial system.”
However, Bellavitis expects the bitcoin and cryptocurrency industries to eventually recover from the FTX meltdown, predicting regulation will help the technology flourish.
“[The collapse of FTX] “Although trust in the cryptocurrency industry will decline, the industry and blockchain technology will take hold,” Bellavitis said, adding, “More regulation and clearer rules will strengthen what this industry can do. just do it,” he said.