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Financial regulators in Europe have issued a press statement calling for the increased regulation of digital asset conglomerates to safeguard investors’ funds from obliteration. The European Chapter of the Financial Stability Board (FSB) announced on November 10 in a terse statement urging global regulators to act with a renewed sense of urgency.

“In light of recent developments, decentralized finance, trading platforms, and so-called crypto conglomerates and exchanges that vertically integrate multiple functions deserve urgent regulatory attention,” the FSB Europe Group statement read.

The statement did not explicitly mention FTX’s recent implosion, but pundits are quick to point out that it has to do with the exchange. The Financial Stability Board, made up of central banks and other financial regulators, has earned a reputation for championing sweeping reforms in the financial industry, especially after the 2008 financial crisis.

With digital assets, the FSB has previously adopted a passive stance on the asset class. The financial regulator stated that while they are inherently risky, digital assets do not pose significant risks to the broader financial markets as it perceived them to be a niche asset class.

This stance is set to change given the mirroring of the prices of digital assets and the securities market, especially with the events following Terra’s collapse back in May. The European arm of the FSB recently concluded a conference in Lisbon with the executives of the European Commission and European Banking Authority in attendance, of which one of the issues for discussion was the “growing interlinkages between crypto-asset markets and the traditional financial system.”

The body cited its central bank group on stablecoins, saying that they pose significant risks to investors and called for new rules to regulate the asset class. The board recommends applying banking regulation to the industry with the prescription of a “same activity, same risk, same regulation” strategy.

A wave of new regulations

The U.S. appears to be the region expecting a barrage of stricter regulations, with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) clamoring for new regulations.

“Look, I think that investors need better protection in this space,” said Gensler. “But I would say this, this is a field that’s significantly non-compliant.”

The SEC says it has brought over 100 enforcement actions against bad actors in the space but notes that if Congress expanded the scope of its powers in the industry, it would police the industry better. On the other side of the world, FTX implosion might bring the gains the industry has made in recent months to a grinding halt as regulators advance with trepidation.

Watch: The BSV Global Blockchain Convention presentation, BSV On-chain Ecosystem Development in Europe

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