The FTX Episode has once again brought to the fore the need for regulatory clarity by the SEC. Coinbase CEO has slammed the SEC for not having a clear regulatory policy for crypto assets and this is forcing many US investors to move to offshore exchanges.
The crypto sector continues to be affected by the FTX Episode liquidity crisis and the exchange is desperately looking for investors. The latest turmoil in the crypto sector has once again drawn the attention of both lawmakers and regulators who want the crypto sector to be brought under some kind of regulation and prevent a recurrence of incidents like the Luna and now the FTX crash.
Senator Elizabeth Warren took this opportunity to blame the crypto space. In her tweet on Wednesday, she wrote:
“The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I’m going to keep pushing @SECGov to enforce the law to protect consumers and financial stability”.
FTX Episode Blamed On SEC
Coionbase CEO Brian Armstrong was more forthright when he indicted SEC for not providing regulatory clarity in its policies towards crypto exchanges. The downside of this policy was that several investors have migrated to offshore exchanges. Brian also said that punishing American Companies for lapses will not serve any purpose.
Brian was also supported by Ripple CEO Brad Garlinghouse who felt that lack of regulatory oversight is eroding trust and transparency in the crypto sector. He also lamented that the lack of proper regulatory guidance is forcing many investors to look at overseas crypto exchanges.
The Ripple Chief also gave the example of Singapore where there is a robust licensing framework, and token taxonomy laid out. It enables appropriate regulation of the crypto sector. They are successful because exhaustive work has been done to clearly define what is good and all tokens must not be blindly treated as securities.