Chair of global securities watchdog the International Organization of Securities Commissions (IOSCO) Jean-Paul Servais has told Reuters that the collapse of FTX makes crypto regulation more urgent.
The shocking collapse of FTX, a promising cryptocurrency exchange that turned out to be run as the personal fiefdom of its former CEO Sam Bankman-Fried, has now become the subject of extensive global regulatory pressure and monitoring.
On the one hand, there are those who are worried about how the loss of billions worth of crypto would have a knock-on effect on mainstream finance.
Then again, there are those who believe that even FTX losing billions of investor funds would not really be a material issue and risk, explained Servais.
However, there is a clear interconnectivity between cryptocurrency and mainstream businesses, and that is why IOSCO wants to make sure that more countries and governments understand that, starting with G20 countries.
FTX is different to low-key crypto companies, Servais said, as the company offers brokerage, custody, and proprietary trading services, among others.
That is why IOSCO will be providing a consultation report to help elaborate on some of the questions that investors now have about what crypto assets are and how regulators such as IOSCO regard them in the context of global finance.
Essentially, IOSCO works as an umbrella regulator for the US Securities and Exchange Commission, the UK’s Financial Conduct Authority, Germany’s Bafin, and Japan’s Financial Services Agency, all of which are keener than ever to examine the collapse of FTX and better understand its implications.
The European Union is similarly spearheading its MiCA framework which should be a strong starting point for further success in regulating the industry.
Servais insists that there is a clear need to regulate crypto conglomerates, citing the FTX collapse as a turning point in global regulation on such companies.
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