FTX CEO Sam Bankman-Fried believes that separate regulation rules need to be developed for each type of cryptocurrency.
Sam Bankman-Fried at the annual Asian Financial Forum in Hong Kong called on regulators around the world to unite and create a unified system of supervision of the cryptocurrency market. The FTX CEO believes common rules will help investors make informed decisions and free the industry from a host of country-specific requirements that can stifle innovation:
“Instead of arguing over whether a product is a security, let’s create a framework that takes into account important things like disclosures and fraud prevention.”
The entrepreneur said that there is a regulatory framework for each specific class of financial assets, so a similar legal framework needs to be created for cryptocurrencies. Bankman-Fried’s appeal is directed primarily to regulators in the United States and Hong Kong, which adhere to the rule that in order to obtain a license, a cryptocurrency exchange must offer one type of stock token – a product structured like a traditional security.
According to Bankman-Fried, the properties of some cryptoassets make them look more like securities. The line is blurred, and such complexity should not distract the attention of regulators, the head of FTX is sure. Regulators should seek to strengthen investor protection by requiring operators to disclose how the supply of cryptocurrencies will change over time or how the token gains value – through the underlying technology or platform.
The FTX chief believes that government digital currencies will not compete with cryptocurrencies or stablecoins, since regulators have only granted access to the banking system. Central Bank digital currencies digitize the existing fiat money system, which is already closed to private users.
Perhaps the arguments of Sam Bankman-Fried will reach SEC Chairman Gary Gensler, who still considers many cryptocurrencies to be securities. In 2021, the Financial Services Committee of the US House of Representatives invited Bankman-Fried to discuss the rules for regulating the crypto industry. On the eve of these hearings, the FTX exchange called on regulators to uniformly regulate the spot and derivatives markets of cryptocurrencies.
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