The collapse of exchange FTX brought back to the table the need for regulation of the crypto industry and although many actors in the sector oppose it, fearing that it will limit development potential, most agree to advance in user protection mechanisms and verifiable asset safeguards that prevent similar events.
It is estimated that close to US$ 8,000 million deposited in the second largest exchange in the world were trapped due to the lack of liquidity of the company to return its, a catastrophic scenario for the confidence of an industry that, despite the drop in price, had been growing steadily.
Currently, the European Union is close to enacting a law that requires a single registry of all exchanges that operate in its jurisdiction, as well as its users, while in the United States a project is advancing to regulate stable currencies (stablecoins), among other points.
The disruptive characteristics, constant innovation and operation without borders make the crypto industry a difficult branch to regulate, given the ease of any company to settle in a country with very lax operating permits and, from there, offer services to the entire world. world.
However, the repeated episodes of scams or the resounding fall of promising projects with billions of dollars of investment show the need to lay minimal foundations so that users are careful and that, in the future, they continue to choose to do so.
that’s where The debate between actors in the sector crosses, born as an alternative to the traditional financial system after the 2008 crisis, in which banks had to be rescued due to unscrupulous decisions with money from their depositors, but today they face similar situations.
“A few years ago, countries began to work on protection against money laundering, compliance regulations and knowing who the clients are to prevent negative uses of the system; we are seeing a consensus among industry players, both exchanges and users and regulators , that there are basic issues to work on,” he told Télam Julian ColomboCEO of Bitso in Argentina.
In this sense, Colombo assured that the transparency of the deposits is a key and that, for this reason, his company guarantees its users that “100 percent of the funds are liquid and guarded and that there are no funds of theirs going around the system”.
“We are going to see in Argentina and in countries in the region in the coming months progress on this is going to accelerate; above all, certain things related to the traceability of operations to see how to recover funds stolen by fraud or stolen”he added.
For its part, Julian SerranoCEO and founder of Ripio, assured that “governments need to be more interested in technology”, since “the worst and most dangerous thing is regulation without understanding, although we may or may not agree with the objectives behind it” .
He also reinforced that it is necessary “to advance in reserve tests, to demonstrate that we have complete custody of our users’ money”, but that the lack of transparency is not exclusive to the issue of funds and that there are other obstacles in between.
“Something complex in the industry is that there are companies that have local operations and that obtain licenses in each country and that try to operate transparently, while there are other companies that operate offshore in much more lax countries. FTX operated from the Bahamas and Binance is constantly changing, for example”he told Télam and other media during the celebration of Labitconf in Buenos Aires.
“It would be ideal if, in order to operate with local currency in a country, there is a clear framework on how to do it. Binance’s P2P -person-to-person- trade allows, with a selfie and a photo of the DNI, to operate with a limit of 5 million dollars. That happens without real control of the funds”, complained the CEO of Ripio.
The possibility that a regulation limits the developments of the sector is, however, a fear of the actors of the sector.
“We are at an early stage and very aligned with the ideals; in Argentina there was never regulation and self-regulation ended up being one of the best tools to finish shaping the market,” said Manuel Beuadroit, CEO of Belo.
For this reason, he stated that the way to ensure that episodes such as those of FTX are not repeated is “that the full weight of the law falls on the people who commit this type of act” and “investing resources in educating society”. “A regulation can be a channel for the river. The question is at what price,” she assured.
Even so, he was in favor of “providing proof of reservations”, but said that “there is a sensitive component is who handles the keys to that”, which would lead to possible theft of holders who protect that data.
“There is a complex line that must be taken into account where a lot of transparency can have an impact on the company. It is a very fine balance”he concluded.
FTX goes bankrupt and drags cryptocurrencies into a tailspin
Crypto exchange platform FTX US, venture lending firm Alameda Research, and 130 other affiliated firms have filed for Chapter 11 of the United States Bankruptcy Code in the district of Delaware.
In a statement – released through the platform’s Twitter account – it is noted that the founder and CEO, Sam Bankman-Fried, resigned from his role in the company naming John J. Ray III as the new CEO. Bankman-Fried will work together to make an “orderly transition.”
“Chapter 11 will allow FTX Group the opportunity to analyze its situation and develop a process to maximize recoveries for its shareholders,” said Ray.who promised each employee and shareholder that this process will be carried out with “diligence, thoroughness and transparency.”
The section of the US law in question allows companies that cannot pay their creditors to file for bankruptcy while continuing to operate, giving them an opportunity to reorganize and negotiate a plan to pay said debts in agreement with the creditors.
The company faces a deficit of around US$ 8,000 million; Before the announcement and after the fall of the acquisition by the rival platform Binance, FTX sought to cover its hole by seeking financing, without success.
The crisis was sown after specialized media spread last week that Alameda Research had most of its assets in FTT, the native token of FTXwith which its users are rewarded for staying and trading on the platform.
The market took this as evidence of great fragility in the face of changes in its price and as a consequence, the FTT collapsed and users came out en masse to withdraw their deposits from the platform.
FTX was under investigation by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, and the US Department of Justice for handling client funds and regulatory violations in force.
“I apologize. That is the most important. I screwed up, and I should have done better,” Bankman-Fried said. on his Twitter account.
The platform -created in 2019- was together with Binance, the leaders of the cryptocurrency deposit and exchange platforms, and registered revenues of US $ 1.02 billion in 2021.
Its name quickly became associated with the crypto craze, paying for Super Bowl ads and even establishing sponsorship deals.
His logo went on to adorn the stadium of the NBA team, Miami Heat (in a 19-year deal) and the Mercedes Formula 1 team, appearing on the cars and uniforms of drivers Lewis Hamilton and George Russell.
