The recent crash in digital assets was well-timed given the ties between traditional finance and crypto are still limited, meaning it doesnt pose a risk to financial stability, BaFin President Mark Branson said at an event in Frankfurt on Monday.
The fall of Bahamas-based FTX, until recently widely perceived as among the most dependable names in the sector, has sparked fresh concerns over the loosely-regulated nature of crypto companies and what guardrails are in place to safely oversee clients’ assets. FTX is the latest in a long list of large crypto businesses to come undone this year, including hedge fund Three Arrows Capital, crypto lender Celsius Network and broker Voyager Digital.
The BaFin head said crypto either needs to be shut out by building a “very, very strong wall” around the traditional banking system or by regulating the industry and “then see if crypto money is in real competition with fiat money.”
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