After the fallout of FTX, it seems like the United Kingdom is taking cautionary lessons. The Country calls for greater regulation come from major institutions. As the FTX fallout is being viewed as a cautionary tale and a precursor for more prudent regulation by public and private sector players in the United Kingdom.
The Interview Highlights
An interview of the Deputy Governor of Bank of England, Sir Jon Cunliffe with Sky News, outlined his belief as greater protection needs to be afforded to investors in his Country. Mr. Cunliffe stressed that potential cryptocurrency users and investors need to have a structure to invest in the asset class that ensures similar consumer protection and integrity to conventional financial markets.
The Deputy Governor said “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.”
In the UK, regulators have tried and failed to impose their writ on crypto exchanges domiciled offshore, while the government has a goal, set out in April by Rishi Sunak when he was chancellor, to make the UK a “global crypto assets hub”, an ambition that depends in large part on effective regulation.
He told Sky News that the Bank’s regulation efforts were aimed at protecting individuals and maintaining financial stability. “There’s a lot of activity that’s developed over the last 10 years on the trading and sale of crypto assets, assets without any intrinsic value, so they’re incredibly volatile. And all of that has grown up outside of regulation,” he added.
Moreover Mr. Cunliffe used the unexpected fallout of FTX as an example, and said “What we saw in FTX… is a number of activities which in the regulated financial sector, would have had certain protections. We saw things like clients’ money appears to have gone missing, conflicts of interest between different operations, transparency, audit and accounting. All of the perhaps boring things that happened in the normal financial sector, didn’t really happen in that set of activities. And as a result, I think a lot of people have lost a lot of money.”
He also compared crypto trading to a casino, and said “investors who wanted to speculate should be able to do so without the risk of losing access to their funds.”
Source: https://www.thecoinrepublic.com/2022/12/28/crypto-is-too-dangerous-not-to-regulate-said-boes-deputy-governor/