Reports: The FSB Will Set Global Rules For How To Regulate Crypto

Dietrich Domanski, who is leaving his job as secretary general of the FSB, said that recent events showed that it’s “urgent to address risks” in the space.

The collapse of FTX caused a global financial watchdog to make suggestions for how to regulate the crypto industry at the beginning of 2023.

The Financial Stability Board (FSB), an international group that keeps an eye on the world’s financial system, is said to have said that it will lay out steps to regulate cryptocurrency next year. Dietrich Domanski, who is leaving his job as the FSB’s secretary-general, said that recent events have shown that it’s “urgent to address risks” in the space. He told them:

“Many crypto market participants argue that authorities are hostile to innovation. I would say so far, and authorities have been fairly accommodating.”

Domanski also said that the goal of making recommendations for crypto regulation is to hold crypto projects “to the same standards as banks” if they offer the same services.

Since major cryptocurrency projects like Terraform Labs and FTX exchange have recently failed, policymakers worldwide have been criticized for letting FTX grow before it blew up. The FSB official said that these rules and standards would have stopped the collapses of Terra and FTX because they wouldn’t have met the “criteria for sound governance.”

In the coming months, the FSB plans to make a schedule for global regulators to follow the first suggestions. After the FSB makes recommendations, rules that everyone agrees on can be made law by different governments and regulators.

Sam Bankman-Fried, the CEO of FTX, was recently arrested by the Royal Bahamas police and will be sent to the U.S. to face charges. The U.S. government told Bankman-Fried in a formal letter that it had filed criminal charges against her. The costs are wire and securities fraud, laundering money, and plotting to commit wire and securities fraud.

Bankman-Fried said he wasn’t in a “Wirefraud” chat group of FTX executives hours before he was taken into custody. It was noted that the group was used to share information about how FTX and Alameda Research worked.