Executives and politicians in the cryptocurrency sector are increasingly calling for a regulation of themas the fallout from the FTX collapse continues to reverberate through the industry.
In the last 24 hours, European Central Bank (ECB) President Christine Lagarde called cryptocurrency regulation and supervision an “absolute necessity” for the European Union, while the chair of the US House of Representatives Committee on Financial Services , Maxine Waters, announced that lawmakers will study the collapse of FTX in an investigation on December 13.
On November 28, US Senator and cryptocurrency supporter Cynthia Lummis described the collapse of FTX as a wake-up call for Congressaccording to The Financial Times.
During an interview at the Financial Times Cryptocurrency and Digital Assets Summit, Lummis said the bipartisan bill he introduced this year would have prevented FTX from collapsing, as regulators would be able to see if an exchange fell below the threshold “immediately.”.
“Those are things that, had they been in place for FTX, would have set off red flags, created enforcement actions and reviews by federal regulatory agencies,” he explained..
For his part, in a talk at the University of Nicosia as part of a Binance Meetup Nicosia, Binance CEO Changpeng Zhao said he believes the regulation is a way to help the industry develop, “protect consumers” and bring due consequences to those who break the law..
Stephanie LinkHead of Investment Strategy and Portfolio Manager at Investment Advisor Hightower Advisors, He has also called for more regulation, stating that cryptocurrencies are “broken and irrelevant” until regulated..
Why do we continue to discuss crypto? Broken and irrelevant. Until there is regulation.
—Stephanie Link (@Stephanie_Link) November 27, 2022
Why do we keep talking about cryptocurrencies? They are broken and irrelevant. Until they are regulated
Tom Dunleavya senior research analyst at cryptocurrency research firm Messari, shared a similar pro-regulation sentiment in a Nov. 28 post on Twitter: He noted that clearer regulation around cryptocurrencies will pave the way “for massive 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 biggest concern for institutional investors when investing in cryptocurrencies is the uncertain regulatory environment. Clearer regulation will pave the way for massive flows. pic.twitter.com/2zBsi4AAXA
“The biggest concern for institutional investors when investing in cryptocurrency is the uncertain regulatory environment,” Dunleavy said..
The cryptanalyst cited the 2022 Institutional Investor Digital Asset Outlook Survey sponsored by Coinbase, which found that just over half of respondents considering investing in cryptocurrency were concerned about the uncertain regulatory environment.
In the past week, Banking and financial services firm JP Morgan, in a Nov. 24 note, said it expects there will be more urgency for a consistent framework after FTX’s collapse..
According to the firm, regulations are likely to be imported from the traditional financial system, “thus causing a convergence of the cryptocurrency ecosystem towards the traditional financial system”.
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