Crypto Execs Ask for Clearer US Regulatory Policy After FTX Collapse
The CEOs of Coinbase (COIN), Ripple and Circle said that a lack of a clear framework from regulators was the reason why most of the crypto trading in the U.S. occurs on offshore exchanges – like the now-struggling FTX.
Replying to a tweet by Senator Elizabeth Warren on the collapse of crypto exchange FTX, Coinbase CEO Brian Armstrong said that FTX was not registered in the U.S. Armstrong added that a lack of clarity from the SEC is the reason most U.S. trading activity occurred offshore.
Backing Armstrong, Ripple CEO Brad Garlinghouse pointed to the regulatory framework in Singapore as an example.
"Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There's a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US," Garlinghouse said.
"Compare that with Singapore which has a licensing framework, token taxonomy laid out, and much more. They can appropriately regulate crypto b/c they've done the work to define what 'good' looks like, and know all tokens aren’t securities (despite what Chair Gensler insists)," he added.
Circle CEO Jeremy Allaire also backed Armstrong and added that lack of a proper regulatory framework in the U.S. has left users exposed to the overseas supervisory structure.
The unprecedented collapse of industry heavyweight FTX and its once beloved founder Sam Bankman-Fried has pushed regulators into overdrive, with FTX facing probes from both the Justice department and the SEC.
When asked in September if the SEC would be more proactive in its regulation of crypto exchanges by CoinDesk, SEC Chair Gary Gensler deflected the question.
Read more: FTX Faces US Justice Department Probe: WSJ