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An Abu Dhabi-based crypto and blockchain association is setting up a new Regulators Committee to help drive change and learn lessons in the wake of last year’s FTX exchange collapse.
The collapse must be a positive driver with increased transparency and better education for investors, according to the Crypto and Blockchain Association (CBA) for the region.
The association said the events last year highlighted the need for fit-for-purpose regulation as well as education for investors.
Jehanzeb Awan of the Middle East, Africa and Asia CBA (MEAACBA) said: “It is pivotal for the industry to help the investing public understand the opportunity and corresponding risks that come with investing in cryptocurrencies.
“The importance of holistic regulation to minimise regulatory arbitrage is key to reducing the impact of the recent events as well as bringing confidence back to the industry.”
Awan said more than ever, there is a need for coordination between regulators, between government agencies and industry bodies to build regulatory framework that goes beyond anti-money laundering and counter terrorist financing.
The MEAACBS said its board is setting up a Regulators Committee which aims to bring together the key regulators in the regions covered by the association, to work together in building regulatory regimes that allow for effective oversight of the crypto industry.
“We as an industry, need to simplify and then educate the wider public to ensure, a reasonable understanding of the industry with its pros and cons,” he said, adding: “As a sector, we have a duty to keep developing, innovating and making the services and products safer for institutions and individuals.”
Need for openness and urgency
Awan said it will only be possible if there is an openness and urgency about improving regulation.
The debate about how to regulate the crypto industry has been a feature since the FTX collapse in November. Changpeng Zhao, who as the founder of the world’s largest exchange in terms of volume, Binance in known simply as CZ, said in the immediate aftermath of the collapse that there needs to be a global industry association.
More recently, wealth manager and private bank Julius Baer highlighted the role of crypto entrepreneurs airing their disputes publicly on Twitter in eroding trust in the asset.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
