An Abu Dhabi-based crypto and blockchain association is setting up a new board of regulators 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 events over the past year have underscored the need for responsive regulation as well as education for investors.
Jehanzeb Awan of the Middle East, Africa and Asia ABC (MEAACBA) said: “It is essential for the industry to help the investing public understand the opportunity and the corresponding risks that come with the investing in cryptocurrencies.
“The importance of holistic regulation to minimize regulatory arbitrage is key to reducing the impact of recent events and restoring confidence to the industry.”
Awan said that more than ever, there is a need for coordination between regulators, between government agencies and industry bodies to build a regulatory framework that goes beyond the fight against money laundering and the financing of terrorism.
MEAACBS said its Board of Directors is establishing a Committee of Regulators which aims to bring together key regulators from regions covered by the association, to work together to develop regulatory regimes that enable effective oversight of the crypto industry.
“As an industry, we need to simplify and then educate the general public to ensure a reasonable understanding of the industry with its pros and cons,” he said, adding, “As an industry, we have the duty to continue to develop, innovate and make services and products safer for institutions and individuals.
Need for openness and urgency
Awan said this would only be possible if there was openness and urgency to improve regulation.
The debate over how to regulate the crypto industry has been a feature since the collapse of FTX in November. Changpeng Zhao, who as the founder of the world’s largest exchange by volume, Binance, known simply as CZ, said immediately after the collapse that there had to be a global industry association.
More recently, wealth manager and private bank Julius Baer highlighted the role of crypto entrepreneurs in their disputes publicly on Twitter by eroding confidence in the asset.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)