Exchange FTX joined several other collapsed projects this year, including Terra (LUNA), 3AC , Celsius and Voyager, in filing for bankruptcy. And given the devastation caused by the multi-billion dollar losses suffered by businesses and investors, Binance CEO Changpeng “CZ” Zhao imagines an era of more intense regulatory scrutiny in the near future.
As for the largest crypto business that fell overnight, CZ believes it is now damaging the industry. which caused a huge loss of consumer confidence. As he said at Indonesia Fintech Summit 2022that:
“I think we look back a few years ago. Regulators will be scrutinizing the industry more, harder, which would be a good thing to be honest.”
Past crypto regulations include Know Your Customer (KYC) and Anti-Money Laundering (AML). Regulations must focus on the execution of the exchange, such as the business model and proof of reserves. More stringent regulatory scrutiny on crypto business operations is at hand.
Although the collapse of FTX had a short-term impact on retail investors, in the longer term, this has prompted discussions on how to manage risks in the crypto ecosystem.
“The past three days were just revealing the issue. And this problem hasn’t happened in the last three days.”
CZ pointed out that the biggest red flag on FTX was Alameda Research’s finances, which were filled with FTX Tokens, prompting him to sell Binance’s $2 billion FTT at the time.
“The original intention was to save lives. But then the news of user embezzlement. especially the investigations by US regulators. (Makes us aware) We can’t touch it anymore.”
CZ believes that increasing transparency and educating regulators on crypto scrutiny and cold wallet data will make the industry much healthier.
refer : LINK
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