United States President Joe Biden calls for stronger regulatory controls over Bitcoin and other cryptocurrencies. This comes as a response to the scandal, potential fraud and money lost through the collapse of Sam Bankman-Fried’s FTX exchange and sister company, Alameda Research.
The aftermath of the collapse leads to unprecedented scrutiny of Bitcoin and other cryptocurrencies. However, the calls for stricter regulatory controls have become cacophony over the last week.
The call by Biden comes after the gathering of the Group of 20 (G20) in Indonesia.
The Move by G20 Leaders
The attending countries’ leaders call for international rules governing the fast-growing crypto space. Additionally, there is a need to establish the move as critical and mitigate the potential risks to financial stability.
According to the leaders, it is crucial to build public awareness of risks, strengthen regulatory outcomes and support a level playing field. However, this should be done while harnessing the benefits of innovation.
This has not been the first attempt to regulate crypto space. Last month, global financial standard-setter the Financial Stability Board (FSB) came up with rules. The rules were to subject crypto companies and markets to rules that govern traditional finance.
Based on the G20 leaders, there is a need to welcome the FSB’s proposed approach, which establishes a comprehensive international framework for regulating crypto-asset activities.
Biden’s Opinion After the G20 Meeting
According to White House Press Secretary Karine Jean-Pierre, without the proper insight, crypto risks harming Americans. As such, it is an important issue for Biden’s government. However, it is important to note that the drive comes after the recent issues, which underscore and prove why prudent oversight of cryptocurrencies is needed.
Moreover, the hole in FTX’s balance sheet triggers a wave of warnings from other crypto companies with FTX exposure. Additionally, it sends them scrambling to distance themselves from the bankrupt exchange.
According to the US Treasury secretary, Janet Yellen, the FTX fall demonstrates the need for more effective oversight of crypto markets.
As such, there is a need to welcome international consistency in regulatory and supervisory approaches to crypto-related activities and markets.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.