We recently had a chance to speak to The Independent and Forbes for articles on the impending regulatory response to the FTX bankruptcy, which will undoubtedly affect the entire crypto sector. A couple of additional thoughts worth mentioning are as follows:
The extended Crypto Winter is likely to hasten regulatory clarity with respect to crypto. While the Congressional bills introduced thus far have favored the Commodities Futures Trading Commission (CFTC) as the chief crypto regulator, the extended crisis in the crypto sector have punched up serious concerns regarding investor protection, which is the focus of the Securities and Exchange Commission (SEC). As a result, we’re likely to see a greater role for the SEC in terms of crypto regulatory oversight.
Furthermore, the Consumer Financial Protection Bureau (CFPB) has intensified its scrutiny of consumer complaints related to crypto. The volume of complaints increased along with the rising adoption of crypto by the mass public. According to the CFPB’s analysis released last month, the topics of complaints included fraudulent transactions, account hacks, missing disclosures, inability to execute transactions or transfer between platforms, and unexpected transaction fees. Separately, earlier this month, the CFPB publicly revealed the existence of an investigation to determine if crypto institutions have violated consumer financial protection statutes. Both the CFPB and state agencies are likely to increase regulatory activity in the face of perceived risks of financial and non-financial loss to consumers.