Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
Crypto Winter No Longer Impacting Long-Term Industry Growth, Says EY Executive – Markets & Prices Bitcoin News
EY’s global blockchain leader says that for the first time ever, crypto’s price fluctuations are not having as much of an impact on the long-term growth of the industry. Nevertheless, he stressed: “It is also important that regulators crack down on obvious Ponzi schemes more quickly and more severely.”
EY’s Brody on Crypto Winter
Paul Brody, global head of blockchain at EY, discussed the crypto winter, the need for regulation and the collapse of the crypto exchange FTX in an interview published by the Mint publication on Thursday.
He was asked if he expects the current crypto winter to end soon. “This is a much milder crypto winter than the last one,” he replied. “One of the main features this winter is that there is a decoupling between the price of crypto assets and the product and engineering development work going on in the crypto industry.” The EY manager believed:
For the first time ever, price ups and downs do not have such a big impact on the long-term growth of the industry. We are slowly moving away from the industry’s purely financial focus.
He added that the Ethereum ecosystem is now much more focused on application development, non-fungible tokens (NFTs) and decentralized autonomous organizations (DAOs).
Brody on FTX collapse and the need for crypto regulation
The EY executive also discussed the collapse of crypto exchange FTX, which some have compared to Ponzi schemes, including the infamous one run by Bernie Madoff.
In response to a question about whether users can trust crypto exchanges after the FTX meltdown, he warned: “The idea behind crypto was that it’s completely transparent because it’s on the blockchain and you can see if something bad happened. That was a flawed theory. Seeing data does not mean you can understand the complex data flow in smart contracts.”
“Entities that have tried to mix on-chain and off-chain financial transactions without robust regulatory oversight are the ones that are not doing well,” Brody continued.
“It has been impossible to know whether your assets are strictly being held and used for you, or whether they are being pledged and used in other scenarios,” the EY blockchain executive warned. “The key is that your governance either needs to be simple enough for people to follow, or you can take a strictly audited and listed approach.”
He also emphasized the need for stricter regulation, stating:
It is also important that regulators crack down on obvious Ponzi schemes more quickly and more severely. I would like to see more regulatory activity and rules that good players can follow.
Following the meltdown of FTX, many people have called on regulators in various jurisdictions to tighten oversight. The Bank of England’s Deputy Governor for Financial Stability Sir Jon Cunliffe stressed this week that the FTX collapse has highlighted the urgent need for tighter regulation. The White House and several US senators have called for proper crypto oversight. A US lawmaker recently urged the Securities and Exchange Commission (SEC) to take decisive action to regulate the crypto industry.
What do you think of the comments from EY’s manager? Let us know in the comments section below.
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