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FTX \u2014 the three letters on everyone\u2019s lips in recent days. For those active in the crypto space, it has been a shattering blow as a tumultuous year for crypto nears an end.\u00a0<\/p>\n
The repercussions are severe, with over a million people and businesses owed money following the collapse of the crypto exchange, according<\/a> to bankruptcy filings. With investigations into the collapse ongoing, it will certainly push forward regulatory changes, either via lawmakers or through federal agencies. <\/p>\n While regulators may feel relieved that the scandal didn\u2019t occur under their supervision, it highlights that there simply hasn\u2019t been enough action taken yet by regulators across the globe toward crypto exchanges, many of whom would welcome clear frameworks by those in power.<\/p>\n Related: <\/em><\/strong>Bankman-Fried misguided regulators by directing them away from centralized finance<\/em><\/strong><\/a><\/p>\n Some have argued that regulators are at fault for allowing or even encouraging FTX\u2019s behavior and by extension, the creation of many flawed cryptocurrencies<\/a>. It\u2019s fair to say that regulators are partially to blame for this tragedy and, while not acting protects them from liability, inaction on their part is equally damaging to their reputation as they are presented as irresponsible for not doing more to protect consumers. <\/p>\n Ripple CEO Brad Garlinghouse tweeted on Nov. 10, \u201cSingapore has a licensing framework, token taxonomy laid out, and much more. They can appropriately regulate crypto b\/c they’ve done the work to define what \u2018good\u2019 looks like, and know all tokens aren\u2019t securities \u2026 to protect consumers, we need regulatory guidance for companies that ensures trust and transparency.\u201d<\/p>\n @SenWarren<\/a>, Brian is right — to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There’s a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US. 1\/2<\/p>\n \u2014 Brad Garlinghouse (@bgarlinghouse) November 10, 2022<\/a><\/p><\/blockquote>\n Cryptocurrencies are a unique asset class that is only continuing to gain traction. The longer the sector goes without defined regulations, the more potential for negative events and crises. Given the novelty and international nature of crypto assets, it is no surprise that regulators are facing an unprecedented challenge that is tricky to navigate. <\/p>\n However, the lack of action taken by regulators is a major factor that contributed to Sam Bankman-Fried\u2019s ability to manipulate and misuse assets for his own benefit \u2014 without direct supervision, any financial service (including banks) might be tempted to use their clients to increase their profits at the risk of putting them in danger of losing all their money. <\/p>\n Related: <\/em><\/strong>Will SBF face consequences for mismanaging FTX? Don\u2019t count on it<\/em><\/strong><\/a><\/p>\n\n