The head of blockchain at EY says that for the first time ever, volatility in cryptocurrency prices does not have a significant impact on the industry’s long-term growth. However, he points out:It is also important that regulators crack down on obvious Ponzi schemes faster and tougher.“
Brody from EY on Cryptocurrency Winter
Paul Brody, global blockchain leader at EY, discussed crypto winter, the need for regulation, and the collapse of cryptocurrency exchange FTX in an interview published Thursday by Mint.
He was asked if he expects the current crypto winter to end soon. He replied, “It is a much milder crypto winter than in the past.” “One of the main features of this winter is the ongoing disconnect between crypto-asset price, product development, and engineering work going on in the cryptocurrency industry.The EY Leader believes that:
For the first time ever, rising and falling prices have little impact on the long-term growth of the industry. We are slowly moving away from the purely financial orientation of the industry.
Added to the ecosystem Ethereum It is now more focused on developing applications, Non-fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs).
Brody on the collapse of FTX and the need for cryptocurrency regulation.
The EY leader also spoke about the collapse of the cryptocurrency exchange FTXwhich some have compared to a Ponzi scheme, including the infamous Bernie Madoff.
In response to a question about whether users can trust cryptocurrency exchanges after the FTX crash, he warned:The idea behind cryptography was that it’s completely transparent because it’s on the blockchain and you can tell if anything bad has happened. It was a flawed theory. Seeing the data does not mean you can understand the complex data flows in smart contracts.“
“Entities that have tried to blend on-chain and off-chain financial transactions without strong regulatory oversight are the ones that are not doing wellBrody continues.
“It was impossible to know if your assets were strictly held and used for your own sake, or if they were encumbered and used in other scenarios.warned EY’s blockchain leader.The key point to remember is that your management should either be simple enough for people to follow, or you can take a rigorous, publicly traded approach to auditing.“
He also emphasized the need for tighter regulation, saying:
It is also important for regulators to tackle clear-cut Ponzi schemes more quickly and with greater severity. I would like to see more organizational activities and rules that good players can follow.
After the collapse of FTX, many regulators in various jurisdictions called for intensified oversight. The Bank of England’s Deputy Governor for Financial Stability, Sir John Cunliffe, noted this week that the collapse of FTX highlighted the urgent need for tighter regulation. The White House and several US senators have called for proper oversight of cryptocurrencies. A US lawmaker recently urged the Securities and Exchange Commission (dry) to take decisive action to regulate the cryptocurrency industry.