After The FTX Fallout, New Regulations Could Lead to Massive Crypto Inflows
While hundreds of stories have been written about the FTX saga, SBF’s wild lifestyle in the Bahamas and the possibility the whole thing was a Ponzi scheme, little has been spoken about how the epic collapse could lead to not only better crypto regulations (which are now a glaring weakness for the space) but could usher in new confidence in exchanges, and a full legitimization of the industry.
Of course, even with the FTX collapse, many in the space find regulation to be antithetical to the purpose of crypto. But if the disappearance of $billion in customer assets has taught us anything, it’s this: better regulation is desperately needed, and good things can come of it.
You see, besides monitoring for fraud and protecting investors, strong regulations will undoubtedly inject a new level of confidence in the industry, and could lead to a far more widespread acceptance and use of cryptocurrency as an investment vehicle. Simply put, as confidence in the industry grows, so too will its investor base. And that confidence should arise from SEC regulations.
Gary Gensler, the Chair of the SEC has made it abundantly clear in the past that the commission intends to be the lead regulator of the US crypto market.
Back in April, Gensler said the top five exchanges accounted for 99% of all cryptocurrency trading and are “likely trading securities” and should have to register with the SEC and comply with all its applicable laws.
Then, in September, Gensler said the SEC will be aggressively policing crypto tokens and intermediaries.
Unfortunately, it’s a day late and a buck short for the SEC, FTX account holders and those of us who are long crypto.
In early November, after things were looking bullish and Bitcoin finally broke above $21k… FTX collapsed, and the crypto market collapsed along with it.
Now, because of FTX, we can fully expect the SEC to step in and finally regulate and legitimize the industry. Yes, SEC regulation is probably coming soon, very soon; and we can thank SBF, his polyamorous cohorts, and whatever really happened at FTX for it.
And regulation can’t come soon enough.
“The lack of regulatory clarity, I think, in the major markets actually pushed a lot of this stuff offshore into these jurisdictions, which didn’t help. That’s where many of these issues have been happening so far, and if we don’t get it regulated here in the U.S.—and other major markets, the U.K., etc.—this stuff is gonna go offshore, and customers are gonna be harmed,” said Coinbase CEO, Brian Armstrong.
But despite FTX and the subsequent crypto crash, Armstrong says he’s “just as bullish on crypto as ever.”
“I’m so glad that (we went public],” he said. “I’m glad that we’re helping the market kind of understand crypto cycles better … because that’s kind of been our history as a company, we want to blaze a trail, legitimize the whole industry. We don’t mind being misunderstood or questioned for a few years. We’re playing this for the long term.”
And for the long term, real regulation will be necessary.
Should the crypto industry be fully regulated by the SEC, as we expect, you can anticipate much more transparency from exchanges, a global legitimization of the industry and potentially millions of new crypto investors entering the space…
As confidence in the system soars!
Read more about Brian Armstrong’s comments, HERE