This week, Germany's top regulator urged for global regulation of the cryptocurrency business in order to safeguard consumers, combat money laundering, and maintain financial stability.
The president of Germany's financial market regulator BaFin, Mark Branson, stated that a hands-off attitude that would "simply let the business expand as a playground for grownups" was the incorrect strategy.
“We’ve seen the self-regulated world. It will not work,” Branson told journalists in Frankfurt on Tuesday evening.
Branson spoke just hours after US authorities charged Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, with misappropriating billions of dollars and breaching campaign rules in what has been described as potentially one of America's largest financial frauds.
According to Branson, a "crypto spring" may follow what has been a "crypto winter," but the industry that emerges will likely have more ties to regular banking, raising the need for regulation.
“Now is the time for serious cryptocurrency regulation,” he said.
“The most important point is that it doesn’t need just a European solution. It needs a worldwide solution.”
The industry's regulation has been patchy and haphazard.
Banks in Germany must obtain licences to deal with cryptocurrency.
The European Union has been working on a new Markets in Crypto Assets Regulation (MiCA), which some, like European Central Bank President Christine Lagarde, believe may need to be enlarged and renamed "MiCA 2" in a future iteration.
Branson has previously expressed reservations about the sector. Last month he noted in an interview on the ECB's website that "not all crypto business models are serious".
“Waves of innovation, as we know, also bring with them freeloaders and crooks,” he said.
By fLEXI tEAM