On Wednesday, Alexandra Jour-Schroeder, Deputy Director DG FISMA in the EU Parliament hearing said that the FTX collapse was not due to a failure of crypto or blockchain. Instead, he blamed SBF for the collapse.
The recent bitcoin crash caused a “crypto winter,” leading to the closure of crypto exchange FTX. On Tuesday, cryptocurrency lender BlockFi filed for bankruptcy protection. The European Union has agreed on new market rules (MiCA) for crypto assets, which are set to go into effect in 2024. This makes the EU one of the first markets to regulate this sector after it shrunk significantly in size.
Cryptocurrency expert Patrik Hansen mentioned in a recent tweet that the update of the EU Parliament hearing on the FTX collapse has implications for the European Union. Alexandra Jour-Schroeder, deputy director general of the European Commission’s financial services area, stated at the EU Parliament hearing that it is critical to finalize MiCA certification with a vote in the European Parliament. According to her, FTX had a lot of procedural problems, including not keeping records or separating customer and corporate accounts. Also, she said that the bloc included 10% of the company’s customers.
The deputy director general also noted the severity of FTX’s collapse, stating “We don’t consider them as blockchain or cryptocurrency asset failures per se”. In response to a question about the requirements for MiCA 2, she said that existing rules which offer significant protections for investors and the financial system should be quickly approved.
Jour-Schroeder stated that the FTX collapse could lead to a rise in people storing their assets in personal wallets rather than exchanges, which wouldcreate more severe risks.
In addition, Steffen Kern, head of risk analysis at the European Securities and Markets Authority (ESMA), criticizes crypto market as a whole. He provides evidence of market manipulation, weak leadership, and a lack of controls. Furthermore, he states that “This sector of the economy has issues. When it becomes effective regulatory framework will be crucial in addressing these problems.”
Apart from that, head of risk analysis, Steffen Kern, at the European Securities and Markets Authority (ESMA), criticizes crypto market as a whole and said there is proof of market manipulation, weak leadership, and a lack of controls. On adding to that he said “This sector of the economy has issues. When it becomes effective, the regulatory framework will be crucial in addressing these problems,”