Crypto executives and politicians are becoming louder in their calls for crypto regulation as the fallout from the FTX collapse continues to reverberate through the industry.
In just the last 24 hours, European Central Bank (ECB) President Christine Lagarde called crypto regulation and oversight “an absolute must” for the European Union, while US Financial Services Committee Chair Maxine Waters announced that lawmakers will investigate the collapse. by FTX in a December 13 survey.
On November 28, US Senator and crypto supporter Cynthia Lummis described the collapse of FTX as a wake-up call for Congress, according to to The Financial Times.
During an interview at the Financial Times’ Crypto and Digital Assets Summit, Lummis said the bipartisan bill she introduced this year would have prevented FTX’s collapse because regulators would have been able to see if an exchange fell below the “Immediate” threshold.
“These are things that, if they were in place for FTX, would have been alarm bells that would have set off regulatory enforcement actions and reviews by federal regulatory agencies,” she explained.
Meanwhile, on stage to speak at the University of Nicosia as part of Binance Meetup Nicosia, Binance CEO Changpeng Zhao said he believes regulation is a way to help the industry develop, “protect consumers” and apply consequences to those caught violating the law.
Stephanie Link, Chief Investment Strategist and Portfolio Manager at investment advisor Hightower Advisors, also called for more regulation, stating that crypto is “Broken and irrelevant” until there is regulation.
Why do we keep debating about crypto? Broken and Irrelevant. Until there is regulation.
– Stephanie Link (@Stephanie_Link) November 27, 2022
Tom Dunleavy, senior research analyst at crypto analytics firm Messari gave a similar pro-regulation sentiment in a Nov. 28 post on Twitter, noting that clearer regulation around crypto 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 institutional investors have with investing in crypto is the uncertain regulatory environment,” Dunleavy said.
The crypto analyst cited the Coinbase-sponsored 2022 Institutional Investor Digital Assets Outlook Survey which found just over half of respondents considering investing in crypto were concerned about the uncertain regulatory environment.
Related: FTX collapse put the Singapore government in a parliamentary seat
Last week, banking and financial services JP Morgan in a note of November 24 said that it expects there will be more urgency to get a consistent framework after the collapse of FTX.
According to the company, regulations are likely to be imported from the traditional financial system, “Thus causing a convergence of the crypto ecosystem to the traditional financial system.”