FTX CEO Sam Bankman-Fried says regulation can prevent the next crypto contagion
FTX CEO Sam Bankman-Fried says stricter regulatory policies could be what prevents the next 2022-like crypto meltdown.
In a new interview on the FTX Podcast, the crypto-billionaire says that while centralized digital asset firms like Three Arrows Capital or Celsius felt a lot of pain during the market downturn this year, the decentralized economy (DeFi) held up quite well.
He says DeFi’s on-chain transparency may have saved the digital asset subsector during the recent crash, and transparency stemming from regulatory oversight may be what prevents another collapse in the broader crypto markets.
“I think one thing that’s worth noting is when you look at the decentralized versions of these, they actually didn’t have a lot of trouble during the last crash, and the reason is that there was transparency on a lot of assets that were backing which loans. And it helped a lot, and so I think having some regulatory oversight of the asset-to-lending ratio here will help ensure that these lending platforms operate responsibly.
I think some of these issues had been brewing for quite some time before they finally surfaced, and so I think just having a little bit of perspective and openness, I think would actually go a long way here to help.
Other than that, I think just getting to a position like a space where there’s regulatory clarity for those who are looking for it or whether there’s clear ways to register products will help a lot, because right now, if it’s not even clear how to sign up, you will get many unregulated products without supervision.”
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