In
a recent panel discussion hosted at the Finance Magnates London Summit
(FMLS:23), prominent figures in the digital asset industry shared crucial
insights into the evolving landscape of crypto regulation. The panel, moderated
by Erwin Voloder, the Head of Policy at the European Blockchain Association, delved
into the challenges and transformations catalyzed by recent events, notably the
collapse of FTX.

The
discussion on Crypto Regulation after FTX underscored the pivotal role of
regulation in shaping the industry’s trajectory. Despite the challenges posed
by FTX’s downfall, the consensus among panelists, including Stephanie Ramezan, the Head
of UK at Gemini, Audris Siow, the Head of Business Development for EMEA at Talos, Dan
Moczulski, the Managing Director for UK at eToro, Andrey Stoychev, the Prime Brokerage at
Nexo, and Alex Royle, the Head of Compliance and Regulatory Affairs for EMEA at
Galaxy, was that regulatory intervention is essential for the industry’s growth
and sustainability.

Transparency,
Compliance, and Trust: Key Themes in Crypto

Reflecting on the market
turbulence in 2021-2022, the panelists emphasized the need for a proactive
approach to compliance. Ramezan highlighted Gemini’s commitment to prioritizing
regulation from the outset, fostering a culture of trust and collaboration with
regulators. „We are so close, yet so far, this is how I feel. I’ve been
speaking on panels in the crypto space for nearly five years, and I feel like
the real progress, especially in the UK, has only really been made in the last
maybe six or nine months,” she added.

Siow
underscored the importance of addressing conflicts of interest and implementing
tried-and-tested practices, such as the separation of responsibilities and
duties. “Regarding regulation or transparency, I think there was a general
sweeping assumption that centralized means there’s no assurance that it gives
you legitimacy. There is still an element beyond transparency and regulation
around it,” she commented.

Moczulski
provided insights from eToro’s
perspective, noting the resilience of the crypto audience during the
„crypto winter.” He observed that unlike traditional markets, crypto
investors tended to hold their positions, indicating sustained demand even in
challenging times.

He commented: „It is clear the Middle East and Asia are
keen on this market. The jury is still out on the US, but there are strong
voices against making it a crypto hub. In terms of the tipping point, only time
will tell. I think we will see over the next couple of years, somewhere will
get this right and others will use that as an example to follow.”

Stoychev,
representing Nexo,
stressed the importance of risk management and compliance, drawing parallels
between developments in the crypto space and experiences in the FX and CFD
world. „Europe, as a location, is much better situated than US in terms of
crypto regulations.”

“They
prepared themselves, working for a few years on the MiCA regulation, which we
are obviously facing next year. They give enough space and time for the crypto
companies to prepare themselves, to start working on the regulations, and to
initiate all the processes to meet the expectations,” he said.

Royle, from Galaxy,
offered a nuanced perspective on the impact of FTX on the industry’s
perception. While acknowledging the shockwaves caused by FTX’s collapse, Royle
pointed out that it served as a catalyst for reevaluating regulatory
assumptions and addressing issues related to trust and misrepresentation.

„I think the other
thing is, the industry as a collective has not done a very good job of telling
regulators or jurisdictions what good regulation looks like. Unfortunately,
it’s still a patchwork, and people still have their own views,” he commented.

Prudential Oversight and
Balanced Regulation: Shaping the Future

The
panel discussion also delved into reflections on the risks associated with
crypto, such as leverage and liquidity, citing instances like Celsius and other
collapses. The conversation shifted to the regulatory landscape, emphasizing
that it was the providers’ failures, not the technology itself, that were on
trial. A comparison was drawn to „Norm Entrepreneurialism” in
political science, exploring how different jurisdictions worldwide approached
crypto regulation.

The
talk explored regulatory effects from various regions, including the UK,
Europe, APAC, and MENA. The panelists discussed the challenges faced by firms
in complying with new rules, emphasizing the need for global harmonization.
Despite the progress in the UK, the holy grail of regulation was yet to be
found in any jurisdiction. The conversation touched on post-FTX developments,
highlighting the sudden focus on audits and stock reports by certain industry
players.

The
panel discussed the importance of transparency and legitimacy in the industry.
There was an acknowledgment that the jurisdiction at the forefront of the
regulatory waterfall was a complex and evolving matter. The UK’s recent
progress was recognized, but the global ideal involved collaboration and
decision-making among stakeholders.

As
the discussion narrowed down to MiCA, the panelists examined its strengths and
areas for improvement. They discussed the comprehensive nature of MiCA and its
role in shaping global regulatory conversations. While recognizing MiCA’s
positive impact, there was a call for faster iterations in addressing gaps,
such as staking and lending.

The
conversation additionally highlighted the significance of prudential oversight,
emphasizing the need for a balanced regulatory approach. The panelists
expressed optimism about the future iteration of rules, expecting a faster pace
due to the industry’s growing dialogue with regulators. The retail perspective
underscored the necessity of embracing and nurturing companies doing things
properly, bridging the gap between regulators and the crypto ecosystem.

Talos Head of BD EMEA Audris Siow will be speaking at The Finance Magnates London Summit 2023 next week on „Perfect Storm? Crypto Regulation After FTX”.🎟️ FMLS:23🗓️ November 20-22 2023📍 Old BillingsgateMore info: https://t.co/oVI3laetIU #TradeWithTalos #fmls23 pic.twitter.com/xzBD7jiPwP

— Talos (@talostrading) November 14, 2023

In
closing statements, the panel emphasized that there was no silver bullet for
crypto regulation. The importance of embracing regulation for industry
legitimacy was stressed, along with the need for ongoing collaboration and
transformation.

The
retail broker’s viewpoint anticipated the impact of upcoming regulations on the
crypto market, questioning whether it would drive participants toward regulated
or offshore markets. The overall sentiment reflected a dynamic industry
grappling with evolving challenges and regulatory dynamics.

The
panelists concurred that the industry’s future success hinges on a
collaborative effort between industry participants and regulators. The
discussion highlighted the maturation of the crypto sector and the imperative
for proactive regulatory frameworks to ensure its long-term viability.

As
business executives navigate the ever-changing landscape of digital assets, the
insights shared during this panel discussion offer valuable perspectives on
regulatory considerations, risk management, and the path forward in a post-FTX
era.

This article was written by Tareq Sikder at www.financemagnates.com.