Rulemakers question whether upcoming regulations will be enough to protect the bloc from future corporate implosions
The collapse of Bahamas-based crypto exchange FTX has sparked fresh debate in Europe about whether the bloc’s digital asset regulations are up to the job of protecting the public against similar calamities. FTX’s spectacular implosion in November further destabilised a market that had already been left reeling after an unprecedented collapse in the summer.
Several once-prominent firms went bankrupt after a 70 per cent drop in crypto token prices, injecting urgency into global policymakers’ efforts to tame an industry widely described as the “wild west” of finance. Although FTX was based in the Bahamas, the reverberations of its collapse is shaping the debate about how best to regulate the crypto industry in Europe.
The EU already has an extensive set of rules, known as the Markets in Crypto Assets regulation, due to come into force in 2024. It has been described as the world’s most comprehensive regulatory package for crypto. Prominent names, such as Binance’s chief executive Changpeng Zhao, have said Mica could become a global standard for the industry. However the fallout of FTX — which at one time was widely considered one of the industry’s most reputable brands — has left experts and rulemakers questioning whether Mica, which has been on the drawing board since 2018, will be up to the task of safeguarding Europe from future crypto implosions...
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