FSB to Set Global Standards for Crypto Regulation: Reports

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The collapse of FTX has prompted a global financial watchdog to issue recommendations to regulate the crypto industry in early 2023.

The Financial Stability Board (FSB), an international organization that monitors the global financial system, has reportedly said it will put in place measures to regulate crypto next year. According to Dietrich Domanski, the outgoing secretary general of the FSB, recent events have highlighted the urgency of dealing with risks in space. He explained:

Many crypto market participants claim that the authorities are hostile to innovation. I would say that so far the authorities have been quite accommodating.

Domanski also noted that the goal of creating recommendations for crypto regulation will be to keep crypto projects to the same standards as banks if they offer similar services to banks.

With the recent collapses of major cryptocurrency projects like Terraform Labs and the FTX exchange, global policymakers have received criticism for allowing FTX to grow before it explodes. According to the FSB official, such rules and standards would have prevented events such as the collapse of Terra and FTX, as they would not have met the criteria of good governance.

In the coming months, the FSB plans to create a timeline for global regulators to implement the initial recommendations. After providing recommendations, the rules agreed at the FSB can be made into law by various national regulators.

Related: Industry Leaders Express Confidence in DeFi Adoption Despite Security Flaws

Meanwhile, former FTX CEO Sam Bankman-Fried was recently arrested by the Royal Bahamas Police Force and is set to be extradited to the United States. The arrest follows official notification by the US government that he has filed criminal charges against Bankman-Fried. The charges include wire and securities fraud, money laundering and conspiracy to commit wire and securities fraud.

Hours before the arrest, Bankman-Fried denied being part of a Wirefraud chat group that allegedly consisted of FTX executives. The group was reportedly used to exchange information about the operations of FTX and Alameda Researchs.

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