FTX Collapse Will Fuel Appetite for Harsher Crypto Regulation
One of the things we’ve been warning about since the $32 billion collapse of the SBF/FTX Ponzi scheme is that it will fuel the appetite for harsher and unwarranted regulation of crypto. We agree that the industry needs clarity and the existing regulatory framework needs a serious overhaul, but the kind of regulation this could bring will seriously stifle blockchain innovation.
Now former US Democratic presidential candidate Andrew Yang is echoing our concern. He told the Texas Blockchain Summit in Austin, Texas, the FTX fiasco will make it harder to pass common sense regulation and predicted it will draw much more draconian measures.
“I've always been in the camp that some intelligent regulation is a good thing. I think it would help the industry mature and make it more mainstream. But, unfortunately, we missed a beat — like a major beat,” he said, referring to the collective failures of FTX, FTX US and Alameda Research.
“Because of FTX and the problems and the headlines and the real people that got hurt, there's going to be an appetite for regulation that, in my mind, might not hit the mark,” he said. “Because you want to be able to balance the very real concerns with the need to keep America the home of innovation and development of these tools.”
Yang acknowledged that the path to regulatory clarity on digital assets is more difficult because of the hyper-politicization of the two-party system. As such, the FTX fiasco will only embolden crypto’s biggest opponents to try and squash the industry. Yang said he’s working with the Bipartisan Policy Center, a Washington, D.C.-based think tank, to educate congresspeople about blockchain technology and its value proposition:
“[W]e work with the Bipartisan Policy Center to liaise with members of Congress or their offices or their policy teams and just educate them about what these tools are and what they can do and the problems they can solve and why their constituents actually care and value them. We work with the American Conference of Mayors to have various mayors stand up and say, look, the blockchain is a good thing.”