Trendspotting: After the spectacular collapse of FTX and rising fears that consumers aren’t being protected adequately, pressure is building on financial services watchdogs to better regulate the cryptocurrency industry.
Regulation roundup: More oversight is coming in major markets. And FTX’s implosion—along with other crypto meltdowns this year, such as stablecoin TerraUSD—could bring new regulation sooner.
The big takeaway: Crypto regulation in most markets has been painfully slow to materialize. But the latest and biggest crypto meltdown of 2022 may shock policymakers into action.
Consumers are undeniably unprotected and at risk under the current regulatory framework in most markets. But disagreements remain in the US as to whether oversight should focus on encouraging innovation or on consumer protection. And the complexity of regulating cryptos is holding back fresh legislation in Europe.
Regulators’ reluctance to set rules for crypto has stunted digital asset market growth. New legislation can help protect consumers, bring cryptos into the mainstream, and prevent future crises.
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