European Parliament economics committee member Stefan Berger has in contrast the present scenario with FTX to the 2008 monetary disaster, utilizing “such Lehman Brothers moments” in justifying the necessity for regulating crypto.
In a Nov. 9 tweet, Berger mentioned correct regulation was wanted to keep away from points which “cost enormous trust” within the crypto area, amid FTX reporting monetary difficulties. The parliamentary committee member pointed to the Markets in Crypto-Assets, or MiCA, framework at the moment shifting by way of the European Council as a technique to require crypto corporations to “ensure internal risk management mechanisms.”
Shame! The #FTX/#Alameda case has value huge belief. Such Lehman Brothers moments should be prevented within the crypto area. That’s precisely what #MiCA is for. Crypto assets are not play cash. Crypto asset service suppliers should guarantee inside danger administration mechanisms. https://t.co/zNrB8CdUbU
— Stefan Berger (@DrStefanBerger) November 9, 2022
“The FTX case makes it clear what dangers a completely unregulated crypto market and crypto exchanges without licenses entail,” mentioned Berger in a written assertion to Cointelegraph. “We still have a large number of crypto asset service providers whose concept is not understandable. MiCA addresses exactly this problem. With a global MiCA, the FTX crash would not have happened.”
He added:
“The crypto space is not a casino. The crash of a $30 billion exchange like FTX has unsettled the entire market […] Regulation is a good tool to restore confidence in the ailing market.”
Berger’s assertion on the “shame” of FTX and Alameda Research got here previous to crypto trade Binance saying on Nov. 9 it did not intend to accumulate the agency. Both Binance CEO Changpeng Zhao and FTX CEO Sam Bankman-Fried publicly got here out in assist of a deal between the 2 main exchanges on Nov. 8 in an effort to handle FTX’s reported “liquidity crunch.” The ongoing scenario with FTX has led to volatility throughout the crypto market and a few lawmakers calling for regulatory readability.
Related: Why is the crypto market down as we speak?
On Oct. 10, the European Parliament economics committee accepted the MiCA laws, a results of trialogue negotiations between the EU Council, the European Commission and the European Parliament. The invoice goals to create a constant regulatory framework for cryptocurrencies among the many 27 European Union member states. EU lawmakers nonetheless must conduct authorized and linguistic checks, approve a last model of the invoice, and publish MiCA within the EU journal, however the coverage may go into impact as early as 2024.
