FTX, one of the largest cryptocurrency exchanges in the world, is starting bankruptcy proceedings in the United States.
Sam Bankman-Fried, the 30-year-old chief executive who once appeared on the cover of Forbes, also resigned days after its bigger rival Binance pulled out of a proposed acquisition.
His successor, John J Ray III, said: “The FTX Group has valuable assets and only
Managed in an organized joint process.
“I want to ensure that every employee, customer, creditor, contractor, shareholder, investor, government authority and other stakeholder, we will do this diligently, thoroughly and transparently.”
Bitcoin and other cryptocurrencies took a hit this week When FTX was on the brink of bankruptcymarking a stunning reversal for a company that was reportedly once worth $32 billion.
The crisis has raised further questions about the regulation of cryptocurrencies and other digital assets.
Brian Armstrong, the CEO of cryptocurrency exchange Coinbase, said earlier in an interview with Sky News that FTX’s rapid demise presents an opportunity for regulators to develop further.
Mr Armstrong told Ian King Live: “One of the challenges facing major financial centres is that we are seeing traditional financial services regulation applied to crypto companies, which is a great start.
“We have also seen the development of regulation of cryptocurrencies in these markets, which we have been strongly supporting, but due to the lack of complete regulation around cryptocurrencies and how it differs from traditional financial services, we have seen a large number of customers offshore To these less regulated exchanges, this is where the explosion happens.
“It underscores the importance of improving some cryptocurrency-specific regulation in these financial centers.”
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How does the UK regulate cryptocurrencies?
Cryptocurrencies themselves are not regulated or approved in the UK, which means investors will have no protection if their currency of choice is affected.
The only part of the industry that is regulated in the UK is when dealing with cryptocurrency exchanges. For example, Binance – one of the largest in the world – Closed in June.
Any cryptocurrency exchange must be registered with the Financial Conduct Authority (FCA) as part of the regulator’s responsibility for money laundering.
Beyond that, the most important form of crypto regulation in the UK is actually the advertising watchdog, which acts when it feels the public is being misled or misled.
For example, last year Premier League club Arsenal eliminated Regarding the Fan Tokens they promote, these tokens “make light of investments in crypto assets.”
FTX crash ‘very rare’
FTX’s drop comes after stablecoin TerraUSD and crypto hedge funds crash Three Arrows Capital This year.
Mr Armstrong insisted this was “very rare, as in traditional financial services”.
“There are many companies in the crypto space, including us, that are regulated and trusted,” he said.
“We are a public company and we have audited our financial statements.
“I think everyone has to realize that there is a big difference between trusted and legitimate money in cryptocurrency and some offshore exchanges that don’t play by the rules.”
Cryptocurrencies have “regressed”
Mr. Armstrong acknowledged that the collapse of FTX had “blocked” the path for cryptocurrencies to become a legitimate asset class.
But he said improved regulation would help boost confidence and ensure a rebound in the market.
“When new technologies emerge, they typically go through these cycles, and good companies can survive those cycles and actually emerge stronger,” he said.
“We’re in a downturn in the broader economy and everyone is trying to break even and see where the bottom might be in this market.
“Our job is to be good stewards of capital. The long-term potential is there.”