Sir Jon Cunliffe, Deputy Governor of the Bank of England, highlighted why the collapse of FTX supports the need for legislation of cryptocurrency firms. While some consumers might move from centralized cryptocurrency exchanges to use DeFi instead, Cunliffe also expressed misgivings about DeFi. However, he is supportive of the innovative potential of smart contracts and the tokenization of real world assets.
Anyone familiar with the FTX bankruptcy filings will be aware of the lack of a board of directors, accounting department and any financial controls.
Talking about the role of regulation, “The first are fundamental issues around how financial institutions should be organised, by which I mean their corporate structure, governance, internal controls and record keeping,” said Cunliffe. “Regulation in the conventional financial sector imposes stringent/substantive requirements. Supervision aims to ensure that these are implemented.”
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