Patrick Murphy 10:44
Yeah, I mean, definitely, like we I was just talking about this with with a couple of people from our risk and compliance team in the office here, like, we were just talking about how there’s been an announcement a few days ago of kind of fully fledged digital asset regulation in Europe, which is under mica, so they’re actually going to have a full regulation for all of the European countries that standardized, but I think it said something around the fact that it won’t really come into practice properly until 2024. So there’s kind of, there’s already been a large period of this kind of gray period for crypto, where, you know, there’s a lot of companies operating with a large amounts of client funds, without much supervision or rules. So it’s kind of up to the crypto exchange or, you know, custody provider to make the rules themselves, and kind of self regulate themselves. And, you know, some of them are probably doing it properly. But there’s always going to be people that are kind of breaking the rules. And, and one of the benefits of kind of breaking the rules at the moment, in respect to like Celsius, and probably some of the other exchanges is that if you don’t have any rules, that you have to keep client funds segregated, and in one spot, and supervised and reported, then you can, you can do something else with those client funds. So that’s what’s been happening where people have kind of been reinvesting client funds or assets to make an interest or make more money. And that’s fine when the markets going up. And it’s actually working, and they’re making money. But when the client when the when the market starts going the other way. You know, this is where a lot of these firms are probably, you haven’t seen them yet. But they don’t have all the client funds there anymore, or client assets. So as I think, you know, the founder of FTX said, there’s going to be more firms that will come out in the next couple of years that go under because they have got things happening behind the scenes that you don’t know about yet. So I think yeah, with Coinbase, as well, that happened a little bit earlier, where, you know, they had to talk about the fact that if they were to go under the client funds wouldn’t be protected. All these things are pretty standard core, you know, core rules in investment licenses, that if you take client funds or client assets, you have to segregate them from the company’s money. So I think we could have moved a lot quicker on those kinds of very basic rules with crypto regulation. So or even, you know, done better to apply some of the existing rules on financial products to crypto, just some of those basic overarching protections of client funds and client assets. It’s, it’s not going to impact the industry, it’s probably something that everyone, you know, is happy to take on. And that’s probably lagged a little bit. That’s been probably one of the biggest, the biggest issues for, you know, for consumers as well as the whole industry.
Source: https://crypto.news/around-the-block-with-jefferson-nunn-interview-with-patrick-murphy-of-eightcap/