Following the FTX crash, Dietrich Domanski, the outgoing secretary general of the Financial Stability Board (FSB), said the standards for crypto regulation are necessary to address risks within the crypto space.
A worldwide financial watchdog took action in response to the FTX crash and issued suggestions to regulate the cryptocurrency market at the beginning of 2023.
According to reports, the Financial Stability Board (FSB), a worldwide agency that keeps an eye on the financial system, will be outlining regulations for cryptocurrencies in 2019.
Dietrich Domanski, the departing FSB secretary-general, said that recent occurrences have shown that it is “essential to address concerns” in the area. He clarified:
“Many players in the cryptocurrency business claim that the government is anti-innovation. Authorities have, in my opinion, been quite cooperative so far.
Domanski further said that if cryptocurrency initiatives are providing services comparable to those provided by banks, the purpose of developing recommendations for crypto regulation would be to hold such projects “to the same standards as banks.”
Global politicians have come under fire for enabling FTX to grow before imploding after the recent failures of significant cryptocurrency ventures like Terraform Labs and FTX exchange.
The FSB official said that these regulations and standards would have averted tragedies like the collapse of the Terra and FTX because they would have complied with the “conditions for good governance.”
The FSB intends to develop a schedule for international regulators to carry out the first proposals in the coming months. The suggestions made by the FSB may then be implemented into national and regulatory laws.
Sam Bankman-Fried, the former CEO of FTX, was recently detained by the Royal Bahamas police and is now en route to the United States for extradition.
The arrest comes after the U.S. government formally announced that Bankman-Fried has been charged with a crime. Charges include money laundering, conspiracy to conduct money laundering, and wire and securities fraud.
A few hours before his arrest, Bankman-Fried refuted claims that he belonged to an FTX executive-led “Wirefraud” discussion group. The group supposedly served as a forum for communication on FTX and Alameda Research activities.
