The crypto market could soon face unprecedented regulatory scrutiny as G20 leaders endorse the FSB consultation paper.
Observers also fear that FTX founder SBF may not face the full consequences of his actions.
The blockchain industry and cryptocurrency market could be the target of even greater global regulatory scrutiny in the wake of the fresh controversies created by the collapse of the Sam Bankman-Fried-owned FTX exchange.
In a statement published on the White House website following a meeting of the Group of 20 (G20) countries held in Bali Indonesia, the leaders of the top global industrial countries led by U.S. President Joe Biden stated that there is a need for international rules to govern the fast-growing Bitcoin and crypto space as the market poses potential risks to financial stability that need to be mitigated.
The statement went on to acknowledge strides being made by the Financial Stability Board (FSB)—the international financial standard-setter—in the direction of providing globally coordinated crypto regulations. It commended the FSB’s consultation paper on crypto regulations released last month. The G20 statement said;
We also welcome the FSB consultation report on promoting international consistency of regulatory and supervisory approaches to crypto-assets activities and markets. It is critical to build public awareness of risks, to strengthen regulatory outcomes and to support a level playing field, while harnessing the benefits of innovation,
The FSB report makes proposals that will see crypto companies and the entire market become subject to the same tough rules that govern traditional finance. The FSB first began work on the consultation report earlier this year.
The G20 leaders’ statement echoes sentiments that have been shared by individual regulators including the U.S. Treasury Department. According to a Reuters report, following the collapse of FTX, Treasury secretary Janet Yellen has renewed her call for the crypto space to have more robust oversight. Yellen said in a statement;
The recent failure of a major cryptocurrency exchange and the unfortunate impact that has resulted for holders and investors of crypto assets demonstrate the need for more effective oversight of cryptocurrency markets,
Will regulators also go hard against SBF?
While the FTX collapse has earned the crypto market renewed regulatory attention, some observers are speculating that the lawmakers may not go too hard on Sam Bankman-Fried, the co-founder and former CEO of the exchange.
Fox Business opined that this could be due to the now ex-billionaire being a major donor to the political activities of the ruling U.S. Democratic Party, funneling more than $38 billion to the far-left party.
In particular, SBF made over $300,000 worth of donations to nine members of the House Financial Services Committee who are supposed to be in charge of the congressional investigation into FTX’s collapse Fox highlighted. This relationship may have compromised the lawmakers according to the report.
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