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With calls to regulate crypto following the FTX meltdown, a legal expert says those calls are misguided.
“When it comes to the regulation of the site in general, I understand that many people are calling,” Cathy Yoon, chief legal officer at MPCH, told Yahoo Finance Live (video above). “They want to do it quickly, but I think the heart of things is to remember that it’s a scam first, it’s not something that affects every crypto space.”
Yoon’s comments came after a court filing by Bahamas investors late Wednesday said there was evidence of “criminal fraud and mismanagement” at FTX.
On Thursday, FTX’s new CEO denounced the company’s “complete lack of corporate governance” and “absolute lack of reliable financial information” in a document filed with a US bankruptcy court. .
Yoon doesn’t think many of the laws championed by former FTX CEO Sam Bankman-Fried will survive.
Bankman-Fried made a strong request to the U.S. Securities and Exchange Commission for an automated collateral system to be used for digital assets in futures markets. The application asks customers to put down collateral and the amount of money to cover the margin requirements is automatically calculated. If the margin is too low, the automatic buying process will start for the investment. Since bankruptcy, FTX has withdrawn its application from the CFTC.
“There are many other bills in Congress,” Yoon said. “I don’t think we’re going to see them moving forward now. There are so many questions that people need answers to.”
Yoon said people want to see their finances and assets improve. “So it’s kind of balancing that line between sensible rules and regulations and trying to protect consumers.”
“I’d like to hope there’s not a knee-jerk reaction here, that we’re not going to get overly heavy-handed legislation to try to do this,” Yoon said. “We certainly don’t want to see new jobs being canceled and destroyed in the United States.”
Sen. Cynthia Lummis (R-WY) told Yahoo Finance Live this week that she doesn’t think lawmakers should take any kind of “immediate action,” but that they should look at things carefully and thoughtfully. last year. Lummis has co-authored a comprehensive bill with Sen. Kirsten Gillibrand (D-NY) to regulate crypto, she is also investigating the collapse of FTX.
The senior member of the Senate Agriculture Committee, Sen. John Boozman (R-AR) said he and Sen. Debbie Stabenow (D-MI) is also looking at her bill to regulate crypto, which would make the CFTC the main regulator for crypto. It’s something the industry likes because it makes it easier to deal with regulations because it’s a smaller agency than the Securities and Exchange Commission and has a smaller budget.
Jennifer covers the Federal Reserve, cryptocurrencies, and the intersection of business and politics. Follow him on Twitter @Jenniferisms.
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