The U.S. Securities and Exchange Commission, Congress, and some global authorities have been trying up their game to bring a clear regulatory pathway for crypto. It is supposed to minimize occurrences like the FTX crisis and keep off bad players from the industry.
The Financial Stability Board (FSB), an international authority that oversees the global financial system, has sprung into action regarding crypto regulations. The board plans to work out a crypto regulatory framework in 2023.
According to Dietrich Domanski, the outgoing secretary general of the FSB, recent events have emphasized the urgency to address the risks within the crypto space.
Domanski explained that several crypto market participants accused authorities of being hostile to innovation. But to Domanski, they have been accommodating to crypto innovations.
He noted that the recommendations for regulations aim to bring crypto projects to the same standard as banks. Domanski believes that crypto projects should operate with these same standards since they provide similar services.
Citing the recent crash of Terraform Labs and the FTX exchange, policymakers faced criticisms. Critics blamed the authorities for allowing FTX to expand before its collapse. But, according to Domanski, a strong set of guidelines could have prevented such events from happening.
The FBS intends to set a timeline for global regulators to implement its recommendations in 2023. After proposing the regulatory recommendations, the rules will undergo assessment and approval at the FSB. Various national authorities and regulators can then put the rules into law.
In recent updates on the FTX fiasco, former CEO Sam Bankman-Fried (SBF) got arrested by the Royal Bahamas police. He is awaiting extradition to the United States. SBF’s arrest comes after the US government notified the Bahamian Police that it filed criminal charges against him.
The criminal charges against SBF include wire and securities fraud, money laundering, and conspiracy to commit wire and security fraud.
Shortly, before he was taken into custody, Bankman-Fried denied being part of a wire fraud chat group. The chat group, allegedly comprising the FTX executives, was a platform for exchanging information about FTX and Alameda Research’s operations.
Meanwhile, the chief restructuring officer and FTX’s new CEO, John Ray, wrote a testimony ahead of his appearance at the House Committee hearing.