IMF calls for tougher crypto regulations

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Following the recent collapse of FTX and the ensuing ongoing lawsuits against its former CEO, Sam Bankman-Fried, the International Monetary Fund has called for increased regulation of crypto markets in Africa.

The IMF made the call on Thursday in its October 2022 Regional Economic Outlook for Sub-Saharan Africa.

IMF says countries in the region should embrace regulation while citing FTX’s collapse and its ripple effect on cryptocurrency prices, prompting new calls for greater consumer protection and regulation of the crypto industry.

Additionally, the fund argued that the risks associated with crypto assets are obvious and that it is time to regulate to strike a balance between minimizing risk and maximizing innovation.

The article states that the risks are much greater if crypto is adopted as legal tender, which poses a threat to public finances if governments accept crypto as a form of payment.

The collapse of the world’s third-largest crypto exchange, FTX, and the subsequent slump in the prices of Bitcoin, Ethereum and other major crypto assets, are prompting renewed calls for better consumer protection and security. regulation of the crypto industry.

Regulating a highly volatile and decentralized system remains a challenge for most governments, requiring a balance between minimizing risk and maximizing innovation. Only a quarter of countries in sub-Saharan Africa officially regulate crypto, the money fund said.

According to IMF data, 25% of countries in Sub-Saharan Africa have officially regulated crypto, while two-thirds have some restrictions in place.

He also explained that Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania and the Republic of Congo have banned the crypto market, which represents 20% of countries in sub-Saharan Africa. Kenya, Nigeria and South Africa have the highest number of users in the region.

Between July 2020 and June 2021, the value of the African crypto market grew by more than 1,200%, according to data from analytics firm Chainalysis, with strong adoption in Kenya, South Africa, Nigeria and in Tanzania.

Meanwhile, crypto industry investors lost $116 billion in the bear market and wave of bankruptcies that engulfed the market in 2022, Forbes said in its recent report.

His report titled These Crypto Founders and Bitcoin Tycoons Lost $116 Billion in 2022, which was released on Saturday, showed a combined personal capital of 17 people in the space, more than 15 of whom lost more than half of their fortune since March.

Therefore, industry watchers believed that the market decline would last until the end of 2023.

According to Forbes, one of the major losses was attributed to Binance CEO Changpeng CZ Zhao.

In March, Zhao’s 70% stake in the crypto exchange was valued at $65 billion, but is now worth $4.5 billion.

Zhao was closely followed by Coinbase CEO Brian Armstrong, whose net worth was estimated at $1.5 billion from $6 billion in March.

Ripples co-founder Chris Larsen’s fortune has risen from $4.3 billion to $2.1 billion while Gemini’s Cameron and Tyler Winklevoss were valued at $4 billion in March but are now worth 1, $1 billion each, Forbes revealed.

Among those who lost billionaire status are FTX co-founders Sam Bankman-Fried and Gary Wang, whose fortunes in March were valued at $24 billion and $5.9 billion, respectively, and $0 in March. December.

The $3.2 billion fortune of Barry Silbert, founder and CEO of Digital Currency Group, was also lost following the contagious wave caused by the collapse of FTX, according to Forbes.

Former billionaires also included Nickel Viswanathan and Joseph Lay of crypto software company Alchemy, Devin Finzer and Alex Atallah of OpenSea, Fred Ehrsam of Coinbase, MicroStrategy founder Michael Saylor and venture capitalist Tim Draper.

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