UK to Take Lessons from FTX Implosion: BoE Deputy Governor
- Private sector entities in the UK are viewing the FTX implosion as a cautionary tale and a forerunner for more rigorous governance.
- Jon Cunliffe, the deputy governor of the Bank of England, said that the crypto investors need better protection.
- Cunliffe emphasized that existing and potential cryptocurrency investors should have a structure for investing in the asset class.
- Founder of FTX, Sam Bankman-Fried, is out on a $250 million bail bond.
While the FTX demise is still wetting the eyes of many, public and private sector entities in the United Kingdom are viewing the incident as a cautionary tale and a forerunner for more rigorous governance.
During a recent interview with Sky News, Jon Cunliffe, the deputy governor of the Bank of England, displayed his belief that the crypto investors need better protection against such incidents in the cryptocurrency markets.
Cunliffe emphasized that existing and potential cryptocurrency investors should have a structure for investing in the asset class that offers comparable consumer protection and integrity to traditional financial markets.
The deputy governor cited the need for more regulatory control in the nation as being driven by financial institutions’ and retail users’ growing interest in cryptocurrency markets. He stated:
“We had banks and investment funds and others who wanted to invest in it and I think we should think about regulation before it becomes integrated with the financial system and before it becomes a systemic problem.”
The 69-year-old also mentioned the recent demise of once-leading crypto exchange FTX. Cunliffe used the exchange’s collapse as an example of how existing regulatory standards governing the traditional finance sector might have offered protection to users who were left with empty hands:
“We saw things like clients’ money appears to have gone missing, conflicts of interest between different operations, transparency, audit and accounting.”
According to the deputy governor, investors should have access to a controlled environment that prevents losing access to their funds, as was the case in the FTX collapse, and compared the situation with the gambling market.
With three different Prime Ministers assuming office in the United Kingdom within a short period of time, 2022 has been a turbulent year for British politics. Despite the political economic disturbance, the country is persistent in its efforts to bring better regulations in the crypto industry.
The collapse of FTX was possibly one of the most highlighted events in the crypto space this year, but as per reports, it wasn’t the worst. Investors lost way more due to the collapse of the Terra ecosystem. However, now that the founder of the crypto exchange has been arrested, several important aspects of the implosion are expected to come to light. Currently, Sam Bankman-Fried is out on a $250 million bail bond.
On the other hand, Alameda CEO and FTX co-founder Gary Wang and Caroline Ellison have pleaded guilty to a total of 11 counts.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
