Joe Biden leads ‘critical’ call for game-changing, global Bitcoin and cryptocurrency regulations after shock FTX collapse

and cryptocurrencies have come under unprecedented scrutiny following the collapse of major cryptocurrency exchange FTX.

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Calls for tighter regulatory oversight have turned into a cacophony over the past week, as the amount of money thought to have been lost by FTX and its sister company Alameda Research has reached eye-popping levels and threatened to engulf the broader cryptocurrency market.

Now, following the recent meeting of the Group of 20 (G20) industrialized nations in Indonesia, the leaders of the participating countries have called the need for international regulations to govern the fast-growing bitcoin and cryptocurrency space “critical” and the potential risks. financial stability” had to be relaxed.

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G20 leaders, including US President Joe Biden, wrote in a statement sent to the White House: “It is critical to raise public awareness of risks, strengthen regulatory outcomes and support a competitive environment while harnessing the benefits of innovation.” Website after a meeting this week in Bali, Indonesia.

Last month, the Financial Stability Board (FSB), which sets global financial standards, proposed rules that would subject crypto companies and markets to the same strict rules that govern traditional finance.

“We welcome the approach proposed by the FSB to create a comprehensive international framework for the regulation of crypto-assets based on the principle of ‘same activity, same risk, same regulation’,” the G20 leaders said. ecosystem of crypto-assets, including the so-called [traditional currency-pegged] stablecoins are closely monitored and subject to strong regulation, supervision and control to mitigate potential risks to financial stability.”

Bahamas-based exchange FTX reportedly lent client deposits to Alameda Research, a trading firm owned by former billionaire and founder Sam Bankman-Fried (SBF), possibly losing $8 billion.

The hole in FTX’s balance sheet triggered a wave of warnings from other crypto companies exposed to FTX, leaving them scrambling to divest from the bankrupt exchange.

US Treasury Secretary Janet Yellen said that the collapse of the FTX is “demonstrating”.[s] the need for more effective oversight of cryptocurrency markets,” he said in a statement this week, adding that the same protections offered in traditional markets should apply to cryptocurrencies.

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“This is not just a bump in the road or even the end of the road, but a wake-up call,” Cristiano Bellavitis, a professor at Syracuse University who specializes in cryptocurrency and blockchain technology, said in emailed comments. “The sector is huge financially, but there is very limited regulation. The same problems would not occur in the mainstream financial system.”

However, Bellavitis expects the bitcoin and cryptocurrency industry to recover from the FTX collapse, predicting that regulation will help the technology flourish.

“[The collapse of FTX] will reduce confidence in the cryptocurrency industry, but this industry and blockchain technology are here to stay,” Bellavitis said. “More regulation and clearer rules will only strengthen what this industry can do.”

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