Bitcoin News and Finance
Yellen Says FTX Collapse Shows Weaknesses of Entire Crypto Sector — Fed’s Brainard Pushes for Strong Regulation Skip to main content

Yellen Says FTX Collapse Shows Weaknesses of Entire Crypto Sector — Fed’s Brainard Pushes for Strong Regulation

Yellen Says FTX Collapse Shows Weaknesses of Entire Crypto Sector — Fed's Brainard Says Strong Regulation Needed

U.S. Treasury Secretary Janet Yellen and Federal Reserve Vice Chair Lael Brainard have stressed the need for strong crypto regulation. Yellen said the FTX collapse shows “the weaknesses” of the entire crypto sector while Brainard cautioned that failures from one platform are “spilling over into elsewhere.”

Yellen: Crypto Needs ‘Very Careful Regulation’

U.S. Treasury Secretary Janet Yellen shared her concerns regarding the implosion of cryptocurrency exchange FTX Saturday in an interview with Bloomberg. She stressed that FTX’s failure has reinforced her view that the crypto market requires “very careful regulation,” emphasizing that “It shows the weaknesses of this entire sector.”

Yellen compared crypto markets to developed financial markets with better investor protection rules, adding:

In other regulated exchanges, you would have segregation of customer assets. The notion you could use the deposits of customers of an exchange and lend them to a separate enterprise that you control to do leveraged, risky investments — that wouldn’t be something that’s allowed.

“At least it’s not deeply integrated with our banking sector and, at this point, doesn’t pose broader threats to financial stability,” she continued, warning that the FTX debacle could have been worse if digital assets were more embedded in the financial system.

Fed’s Vice Chair: Crypto Needs ‘Strong Regulatory Guardrails’

Federal Reserve Vice Chair Lael Brainard similarly stressed the importance of strong crypto regulation in an interview with Bloomberg Monday.

She noted that the crypto sector has proven to be susceptible to the same risks as traditional finance and should be subject to the same rules. Reiterating her long-held view that crypto finance needs strong regulation, Brainard opined:

It’s really concerning to see that retail investors are really getting hurt by these losses.

The Federal Reserve vice chair added: “Despite a lot of hype … you heard a lot about how decentralized these markets are … it turns out they are highly concentrated, highly interconnected, you are just seeing a domino effect, failures from one platform spilling over into elsewhere.” She concluded:

It reinforces I think this need to make sure that crypto finance, because it is no different than traditional finance in the risks that it exposes, needs to be under the regulatory perimeter … There need to be strong regulatory guardrails.

Following the bankruptcy filing of FTX, a growing number of lawmakers are calling for stricter crypto regulation. The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has warned that the crypto field is “significantly non-compliant.” Last week, the White House and several U.S. senators also called for proper crypto oversight.

What do you think about the comments by Treasury Secretary Janet Yellen and Federal Reserve Vice Chair Lael Brainard? Let us know in the comments section below.

Labels:

Comments

Post a Comment

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl
Post a Comment
Read more

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju
Post a Comment
Read more

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and
Post a Comment
Read more

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r
Post a Comment
Read more
Blogarama - Blog Directory