After the collapse of the FTX Stock Exchange.. Calls to regulate the currency and crypto assets sector

08:30 PM

Sunday 13 November 2022

Cairo – Masrawy:

The collapse of the FTX exchange and the announcement of its bankruptcy has sparked new calls to regulate the crypto-asset sector, which has seen accumulated losses this year with the collapse of cryptocurrency prices, according to Reuters.

The cryptocurrency exchange FTX announced its bankruptcy last Friday, which was founded by Sam Bankman Fried, and was considered one of the largest cryptocurrency exchanges, which led to the collapse of the fortune of the crypto billionaire Bankman Fried from about $ 16 billion to less than a billion dollars within two days. Just.

The crisis that toppled the large stock exchange and its young founder led to repercussions related to losses of millions of dollars, whether in the form of outflows from the platform or what is suspected of piracy and theft.

US Treasury Secretary Janet Yellen said the collapse of Sam Bankman Fried’s FTX crypto empire reinforced her view that the digital asset market requires “very careful regulation.”

“It shows the weaknesses of this entire sector,” the minister added, during an interview with Bloomberg on Saturday, about this collapse.

The recent events represented a dramatic downfall for a company that last year said it had more than 5 million users worldwide, and traded more than $700 billion in cryptocurrencies that year alone, according to Bloomberg.

The FTX turmoil has rocked the cryptocurrency market, which is already suffering from low prices for months.

“On other regulated exchanges, you would have a segregation of client assets,” Yellen said. “The idea that you could use customer deposits on the platform and lend them to a separate institution that you control to make risky, leveraged investments — that would not be something that would be allowed.”

In contrast, Brian Armstrong, CEO of cryptocurrency trading company Coinbase, said in an article for CNBC that in the wake of this week’s events, we are already seeing calls for more regulation of the crypto sector, with tighter restrictions on Access and innovation.

He added that the problem so far has been the refusal of US regulators to provide clear and reasonable regulations for cryptocurrencies that would protect consumers.

Armstrong stated that crypto regulation in the United States has been difficult to deal with, and regulators have so far failed to provide a workable framework for how to provide these services in a secure and transparent manner.

“They don’t want to break the rules, and now they don’t know what the rules are,” he said.

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