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Joe Biden Leads ‘Critical’ Call for Game Change, Global Rules for Bitcoin and Crypto in the Aftermath of FTX’s Shock Crash

Joe Biden Leads 'Critical' Call for Game Change, Global Rules for Bitcoin and Crypto in the Aftermath of FTX's Shock Crash

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and cryptocurrencies have come under unprecedented scrutiny following the collapse of major crypto exchange FTX.

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Calls for stricter regulatory oversight have turned into a cacophony over the past week as the amount of money believed to have been lost by FTX and its subsidiary Alameda Research reaches mind-blowing levels and threatens to engulf the broader cryptocurrency market.

Now, after the last meeting of the industrialized countries of the Group of 20 (G20) in Indonesia, the leaders of the participating countries called the need for international rules to govern the rapidly growing bitcoin and crypto space “critical” and said potential risks to “financial stability” needed to be mitigated.

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“It is critical to raise public risk awareness, strengthen regulatory outcomes, and maintain a level playing field while reap the benefits of innovation,” G20 leaders, including US President Joe Biden, wrote in a statement posted at the White House. website after this week’s meeting in Bali, Indonesia.

Last month, the Financial Stability Board (FSB), which sets global financial standards, proposed rules that would make crypto companies and markets subject to the same rigid rules that govern traditional finance.

“We welcome the approach proposed by the FSB to create a comprehensive international system for regulating transactions with cryptoassets based on the principle of “same activity, same risk, same regulation,” the G20 leaders said, adding that they want to “ensure that the ecosystem of cryptoassets, including so called [traditional currency-pegged] stablecoins is under close scrutiny and strong regulation, oversight and oversight to mitigate potential risks to financial stability.”

Bahamas-based exchange FTX has reportedly lent client deposits to Alameda Research, a trading company also owned by former billionaire founder Sam Bankman-Freed (SBF), which may have lost up to $8 billion.

The gaping hole in FTX’s balance sheet has triggered a wave of warnings from other FTX-affected crypto companies and has forced them to do their best to distance themselves from the bankrupt exchange.

US Treasury Secretary Janet Yellen said the fall in FTX “demonstrates[s] the need for more effective oversight of crypto markets,” the statement said this week, saying the same protections offered in traditional markets should apply to crypto assets.

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“This is a wake-up call, not just a bump in the road or even the end of the road,” Christiano Bellavitis, a Syracuse University professor who specializes in cryptocurrency and blockchain technology, said in email comments. “The sector is huge financially but has very limited regulation. The same problems would not arise in the mainstream financial system.”

However, Bellavitis expects bitcoin and the crypto industry to eventually bounce back from the FTX crash, predicting that regulation will help the technology thrive.

“[The collapse of FTX] will reduce the credibility of the crypto industry, but this industry and blockchain technology will remain,” Bellavitis said. “More regulation and clearer rules will only strengthen the industry’s opportunities.”

Written by khirou

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