An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong, on Feb. 17, 2022. Bitcoin slumped to a two-year low, Wednesday, Nov. 9, and other digital assets sold off following the sudden collapse of crypto exchange FTX Trading, which has been forced to sell itself to larger rival Binance. that will lead to a much-needed regulatory crackdown, crypto CEO Changpeng Zhao warned on Friday.
Zhao was a key player in the downfall of FTX. Binance reached a tentative rescue deal with FTX earlier this week, but that transaction almost immediately fell apart, paving the way for Friday's bankruptcy filing and the resignation of FTX founder Sam Bankman-Fried. "Regulators, rightfully, will scrutinize this industry much, much harder, which is probably a good thing to be honest," Zhao said. "Short-term, it's very painful for retail investors...We feel that pain. But longer-term, this is another wakeup call to say, 'Look, we are in a new industry. There are a lot of risks and we need to learn how to deal with these risks."
Should ban the crap
I'm not opposed to regulatory scrutiny of crypto exchanges. Binance and are transparent about their financials, so they have nothing to fear. Too bad the central banks are not transparent about their fractional reserve system and the associated risks.