by Hugh Jones
LONDON (Reuters) – The resounding bankruptcy of crypto-asset trading platform FTX makes regulation of this sector more urgent and this type of “conglomerate” will be a priority in 2023, the new chairman of FTX told Reuters, the coordinating body for financial authorities.
For Jean-Paul Servais, regulation of “crypto” platforms could be based on key principles applicable in other areas at risk of conflicts of interest, such as financial rating agencies or index specialists. contracts, an approach that would obviate the need to develop it from scratch.
If the crypto-asset space does not have its own regulations yet, the fall of FTX, which left behind nearly a million creditors and billions of dollars in losses, would make it possible for the field to move forward, Jean-Paul Servais stated. .
“The sense of urgency wasn’t the same as two or three years ago. There are some mixed opinions about whether this is a real issue at the international level because some think it’s not a big issue or a risk,” he said.
“Things are changing and with the interdependence of the different types of activities, I think it’s important now that we’re able to open up the discussion, and that’s where we’re going.”
IOSCO, which coordinates regulations for G20 countries and others, has laid out principles for regulating “stablecoins,” a specific class of crypto-asset pools, but the focus is now on the platforms on which those assets are exchanged.
In ‘classical’ finance, there are clearly drawn demarcations between brokerage, exchange, banking and issuing activities, each with its own code of conduct and regulatory framework.
“Is this the case for the cryptocurrency market? I wouldn’t say that most of the time,” said Jean-Paul Servier.
Jean-Paul Servais explained that the cryptocurrency industry has spawned many conglomerates such as FTX, which perform various roles ranging from brokerage and custody services to proprietary trading and the issuance of “tokens,” with the risk of finding themselves in a situation of conflict of interest.
“For investor protection reasons, there is a need to bring more clarity to these crypto markets through targeted oversight of the application of the IOSCO Principles to crypto assets,” he said.
“We intend to publish an advisory report on these topics in the first half of 2023,” he said.
said Jean-Paul Servais, who also heads the FSMA, the Belgian Financial Services and Markets Authority.
He emphasized this by saying, “We know there is space to develop new rules in the supervision of this type of crypto-blockchain. There is a clear need.”
(Reporting by Hugh Jones; French transcription by Marc Angrand; Editing by Blandin Henault)