FTX collapse raises questions about the future of crypto regulation

MLex Market Insight

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4.9 • 9 Ratings

🗓️ 18 November 2022

⏱️ 11 minutes

🔗️ Recording | iTunes | RSS

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Summary

It wasn’t long ago that Sam Bankman-Fried, the former CEO of crypto-currency company FTX, was talking about bailing out his struggling rivals in order to safeguard the “crypto ecosystem.” But Bankman-Fried is now in no position to bail out anyone, following a week of turmoil that saw FTX filed for bankruptcy and freeze all withdrawals. What has emerged since then is what the company’s new CEO, John J. Ray, has described as a “complete failure of corporate controls” that has prompted renewed calls to regulate the crypto industry. But for now, the FTX implosion appears likely to tarnish other crypto players and, indeed, the entire ecosystem.

Transcript

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0:00.0	It's not going to be good for anyone long term.
0:13.0	If we have real pain, if we have like real blowouts.
0:19.0	And it's not fair to customers. And it's not going to be good for regulation.
0:24.6	It's not going to be good for anything.
0:26.6	And that was Sam Bankman Freed, the former CEO of cryptocurrency company FTX,
0:31.6	speaking just a few months ago about the idea of bailing out failing cryptocurrency companies to safeguard what he described as the
0:39.9	crypto ecosystem. Of course, FTX won't be bailing out anyone, not even itself. The company has
0:46.6	filed for bankruptcy after a tumultuous week in which its cryptocurrency FTT collapsed and
0:53.3	withdrawals from investors were frozen. And the upheaval
0:57.5	now indeed appears set to hemorrhage into the ecosystem that Bankman Freed was so keen to
1:03.9	protect. Welcome to Emlex's podcast hosted by me, James Panicki, and this week we'll delve into the
1:09.7	collapse of FTX.
1:11.2	We'll postpone for now our scheduled chat on the DOJ's response to common ownership.
1:16.0	We hope to get to that in coming weeks.
1:18.4	Now, the new CEO of FTX, John J. Ray, says that the cryptocurrency company suffered a complete
1:24.9	failure of corporate controls in what amounted to an unprecedented debacle.
1:30.5	So there's lots of pain ahead clearly.
1:34.0	And what always interests us here at MLEX is the extent to which an event like this is likely to rally
1:40.3	regulators around the world.
1:42.7	Phoebe Sears is a London-based Mlex correspondent. She's been
1:46.3	covering the FTX case this week with particular interest and she joins us now. So Phoebe,
1:53.0	in a nutshell, tell us what happened, what we need to know. Okay, James. So FTCX, once the fourth largest crypto exchange in the world,
	...

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