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“Crypto assets are not play money”

Published on

January 10, 2023
Read Time:2 Minute, 8 Second

Stefan Berger, a member of the European Parliament's Financial Affairs Committee, has in contrast the present state of affairs with FTX to the 2008 monetary disaster and used "these Lehman Brothers moments" to justify the necessity to regulate crypto.

In a Nov. 9 tweet Berger said Acceptable regulation was wanted to keep away from points that “value super belief” within the crypto area as FTX reported monetary difficulties. The parliamentary committee member pointed to the Markets in Crypto-Belongings (MiCA) framework, which is at the moment going via the European Council to require crypto corporations to “guarantee inside threat administration mechanisms.”

Disgrace! That #FTX/#Alameda Case has value monumental confidence. Such Lehman Brothers moments have to be prevented in crypto area. That is it #Mica is for. Crypto property aren't play cash. Crypto asset service suppliers should guarantee inside threat administration mechanisms. https://t.co/zNrB8CdUbU

— Stefan Berger (@DrStefanBerger) November 9, 2022

“The FTX case highlights the risks of a totally unregulated crypto market and unlicensed crypto exchanges,” Berger stated in a written assertion to Cointelegraph. “We nonetheless have a mess of crypto asset service suppliers whose idea is meaningless. MiCA addresses precisely this downside. With a world MiCA, the FTX crash wouldn't have occurred.”

He added:

“The crypto area isn't a on line casino. The crash of a $30 billion alternate like FTX has unsettled your entire market [...] Regulation is an effective instrument to revive confidence within the ailing market.”

Berger's assertion about FTX and Alameda Analysis's "disgrace" got here earlier than crypto alternate Binance introduced on Nov. 9 that it has no intention of buying the corporate. Each Binance CEO Changpeng Zhao and FTX CEO Sam Bankman-Fried have publicly supported a deal between the 2 main exchanges on Nov. 8 to deal with the “liquidity disaster” reported by FTX. The continuing state of affairs with FTX has prompted volatility throughout the crypto market and a few lawmakers are calling for regulatory readability.

Associated: Why is the crypto market down at the moment?

On October tenth, the Financial Affairs Committee of the European Parliament adopted the MiCA laws on account of the trilogue negotiations between the EU Council, the European Fee and the European Parliament. The draft regulation goals to create a unified regulatory framework for cryptocurrencies between the 27 member states of the European Union. EU lawmakers have but to conduct authorized and language evaluations, approve a closing model of the draft regulation and publish MiCA within the EU Journal, however the directive may come into power as early as 2024.

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Azeez Mustafa
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author.
Last Updated : January 10, 2023
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