Germany’s top financial industry regulator is calling for global regulations of digital assets to protect consumers and curb crime amid the collapse of FTX and the arrest of its founder Sam Bankman-Fried.
“We’ve seen the self-regulated world. It will not work,” Mark Branson told journalists this week. He believes the hands-off approach taken by many regulators, which focuses on letting the industry grow “as a playground for grownups,” isn’t working.
Branson took over the helm as the president of the German Federal Financial Supervisory Authority (BaFin) in 2021. Since then, he has advocated for a balanced regulatory approach that protects investors while promoting innovation.
While the ‘crypto winter’ has wiped out over 75% of the digital asset market value, Branson believes that a ‘crypto spring‘ is coming and the industry will recover. However, by then, digital assets will be more closely intertwined with traditional finance, making it critical for regulators to be on top of their game.
“Now is the time for serious cryptocurrency regulation. The most important point is that it doesn’t need just a European solution. It needs a worldwide solution,” he told journalists, as reported by Reuters.
“Overall, banks’ interest in offering crypto-asset trading to their customers still seems, to me, to be limited…certain crypto-assets based on blockchain technology carry significant risks, especially if they are seen as an investment. At present, they do not pose a threat to financial stability,” said Branson, who also serves as a member of the Supervisory Board of the European Commercial Bank.
Branson’s remarks come at a time when key digital currency industry figures are facing criminal prosecution for their roles in multi-billion-dollar collapses this year. The most recent is Sam Bankman-Fried, who was recently arrested in the Bahamas. His exchange, FTX, collapsed last month following years of fraud and gross mismanagement from the top brass. Korean authorities are also going after Do Kwon, the founder of LUNA and UST, which imploded in May.
Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets
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