Politicians Call for Crypto Regulations As FTX Contagion Spreads

The US and European politicians are calling out for crypto regulation. Is the FTX collapse a catalyst for the global regulations on crypto?

The crypto regulations are the need of the hour after the recent FTX collapse. The most recent victim of the FTX contagion is the BlockFi exchange, which filed for bankruptcy today. Governments worldwide are exploring how this new asset class can be regulated. 

The Pro-Bitcoin Senator Calls for the Crypto Regulation

According to a Financial Times report, Cynthia Lummis, a pro-Bitcoin senator from Wyoming, believes that the members of Congress should learn about the asset class to regulate it. Last year, the senator invited Bitcoin miners by tweeting, “We WANT you in Wyoming.”

To put forward her point for crypto regulation, she stated, “I hope [FTX’s collapse] highlighted with members of Congress who have not taken the time to learn more about this asset class, that it’s time for them to learn more about it so we can engage in proper regulation.”

Regulatory bodies like the Securities and Exchange Commission (SEC) are under pressure after the FTX collapse. US Congressman Tom Emmer has criticized the SEC chair, Gary Gensler. 

He says, “We need to get to the bottom of this—we need to understand why Gary Gensler and the SEC were not doing their job.”

It’s a Wake-up Call for Regulation: European Officials

The European Central Bank official – Elizabeth McCaul believes that the recent events in the market are a wake-up call for the regulators globally to start the conversation about crypto regulations. 

She spoke at the FT Crypto and Digital Asset Summit,  “I would call for great harmonisation among various regulatory frameworks in place so that gaps don’t occur that are missed by regulators,” 

Bank of England Deputy Governor Jon Cunliffe said that cryptocurrencies and associated services should come under greater regulation. Last month, the EU financial services commissioner Mairead McGuinness urged US lawmakers to create comprehensive new crypto regulations and international industry standards.

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