Key Points:
For instance, many companies such as FTX and Celsius have been accused of poor record-keeping and misusing customer funds.
As a result, the Financial Stability Board (FSB), which groups regulators from some two dozen jurisdictions, including the U.S., EU, China and the U.K., published recommendations to ensure “consistent and comprehensive” regulation of the sector. The recommendations build on proposals originally floated in October and are focused on preventing the kind of behavior that has been alleged to have been carried out by companies such as FTX and Celsius.
“The events of the past year have highlighted the intrinsic volatility and structural vulnerabilities of crypto-assets and related players,” said the document. It unveiled new norms that could see major conglomerates forced to separate some of their activities and functions. This is aimed at ensuring that clients’ assets are better protected.
FTX is one of the companies that have been hit by a wave of allegations of poor record-keeping and misuse of customer funds. Meanwhile, Celsius co-founder and ex-CEO Alex Mashinsky has been arrested in New York on multiple charges that he misled investors and manipulated token prices for personal gain.
In setting out the rationale for tougher global rules, the FSB also referred to the recent collapse of crypto-focused banks, the brief de-pegging of Circle’s USDC stablecoin two months ago, and the sudden downfall of the terraUSD stablecoin in May 2022 that heralded a new crypto winter.
Global players are taking different approaches to how to regulate crypto. While the European Union has crafted a new tailored law known as the Markets in Crypto Assets (MiCA) regulation, the U.S. Securities and Exchange Commission (SEC) is seeking to argue it can apply existing hundred-year-old rules originally designed for traditional financial instruments.
The principles from the FSB should be flexible enough to allow both approaches, but officials are keen to stress continuity. “This global framework does not rewrite or create a completely new regulatory rulebook for crypto assets,” FSB Secretary General John Schindler told reporters. “Crypto asset activities are not as different from traditional financial activities as some would have us believe, and similar rules should apply.”
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Here are the latest predictions for Dogecoin, Shiba Inu, and ETFswap.
Discover BlockDAG's 100% bonus and $110M presale surge that’s sparking interest among crypto enthusiasts. Also,…
Discover why crypto investors are moving to ETFSwap (ETFS) as $500 million liquidity injection is…
Learn about BlockDAG's $110M presale achievement and the whopping 100% bonus offer, alongside Ethereum's growth…
Thai police corruption exposed as officers extort millions in USDT from a Chinese man under…
SafePal Telegram Wallet allows 950 million users to create compliant crypto-friendly Swiss bank accounts, integrating…
This website uses cookies.