FTX CEO SBF Says A Clear Regulation Process May Help Curb Crypto Meltdown.
Sam Bankman-Fried (SBF), the CEO of FTX, a cryptocurrency exchange said in an interview on the FTX podcast that the next crypto meltdown may be prevented by a more stringent regulatory policy.
The Recent Crash Doesn’t Affect Decentralized Versions
During the market downturn of this year, digital asset centralized firms such as Three Arrows Capital or Celsius suffered a lot of damage, but the decentralized finance (DeFi) space did well.
“I think that one thing worth noting is when you look at the decentralized versions of these, they actually didn’t have big problems during the most recent crash and the reason is that there was transparency on a lot of assets that were backing which loans,” said the CEO.
Previously, as a result of a month of turmoil, Celsius Network (CEL) filed for Chapter 11 bankruptcy on July 13. Meanwhile, liquidation has occurred at cryptocurrency hedge fund Three Arrows Capital or also known as 3AC.
He added that “And that helped a lot, and so I think having some regulatory oversight of the asset-to-loan ratios here would help make sure that these lending platforms are operating in a responsible manner.”
Regulatory Clarity and Transparency Helps Prevent It
Sam Bankman-Fried also said that the problem “ had been brewing for quite a while before they actually ultimately surfaced, and so I think that just having a bit of oversight and transparency I do think would actually go a pretty long way here towards helping.”
“Outside of that, I think just getting to a position as a space where there is regulatory clarity for those who are looking for it or whether there are clear ways to register products, will help a lot because right now, if it’s not even clear how to register, then you’re going to get a lot of unregulated products with no oversight,” he said.