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Germany's top regulator this week called for global regulation of the cryptocurrency industry to protect consumers, prevent money laundering and preserve financial stability.
Mark Branson, the president of Germany's financial market regulator BaFin, also known as the Federal Financial Supervisory Authority of Germany, said a that hands-off approach that would "just let the industry grow as a playground for grownups" was the wrong tactic.
"We've seen the self-regulated world. It will not work," Branson told journalists in Frankfurt on Tuesday evening.
Branson was speaking hours after U.S. prosecutors accused Sam Bankman-Fried, founder of cryptocurrency exchange FTX, of misappropriating billions of dollars and violating campaign laws in what has been described as potentially one of America's biggest financial frauds.
[...] Regulation of the industry has been loose and patchwork at best. Germany requires licences for banks to deal with cryptocurrency.
[...] The European Union has been working on a new Markets in Crypto Assets Regulation (MiCA) that some, including European Central Bank President Christine Lagarde, say would need to be broadened out in a future iteration and branded "MiCA 2".
(Score: 2, Insightful) by khallow on Sunday December 18 2022, @04:04PM (8 children)
News flash: it doesn't have to work. Unless you're in on crypto (that is, hodling crypto [knowyourmeme.com] not even merely using it short term for purchases) it doesn't matter what crypto does or how badly it fails. But sure, let's use excessive government power to solve non-problems.
Here's my take on the necessary level of government power needed. A microwave around 1000W power and some pop corn.
(Score: 3, Interesting) by PiMuNu on Sunday December 18 2022, @05:13PM (3 children)
> it doesn't have to work.
Unfortunately, if an emerging market, be it dotcoms, crypto or the price of tulips, takes a big enough volume of capital then the financial system as a whole becomes exposed to it. Capitalism sits on a horrible, high dimensional and nonlinear differential equation with unexpected feedback loops all over the place. It seems to me that there is no stable equilibrium and the system requires constant tuning to stop it from falling over.
So while you may not be directly exposed to crypto, if you have a mortgage or savings account, as 99% of folks have, then you are exposed to such things.
(Score: 1) by khallow on Monday December 19 2022, @04:22AM (2 children)
Then you need a firewall between the risky stuff and the pension funds. They already do that, right? If not, then regulators aren't doing their job and we have bigger problems than the lower regulated nature of crypto.
(Score: 2) by PiMuNu on Monday December 19 2022, @09:36AM (1 child)
> Then you need a firewall between the risky stuff and the pension funds
There is no leak-proof firewall. That's my point. If crypto (tulips) hold enough capital, they can dip the entire market.
(Score: 1) by khallow on Monday December 19 2022, @03:18PM
Doesn't have to be perfect.
"IF". We have yet to show that is a real problem. My bet is that this continuing string of highly public failures keeps capital away from the crypto mosh pit. It's the market working as intended.
(Score: 0) by Anonymous Coward on Sunday December 18 2022, @07:01PM (1 child)
You seem to be under the impression that regulation leads to institutional corruption. Maybe so, but absence of regulation does not lead to freedom - it leads to criminal corruption. We have shown over the past 1000 years or so that we are slowly getting a grip on institutional corruption (Kings, emperors, dictators).
(Score: 1) by khallow on Monday December 19 2022, @03:11AM
It leads to institutional corruption that matters. If the organizations are low funded and powerless, then it really doesn't matter how corrupt they get.
Will messing with crypto by these clods prevent the disappearance of any regulation? Else there won't be an absence of regulation. For a glaring example, gains on crpyto is taxable almost everywhere. Failing to report those taxable gains is similarly illegal. Increased or reduced global regulation of crypto doesn't change that a bit.
(Score: 2) by quietus on Tuesday December 20 2022, @05:37PM (1 child)
Define excessive.
(Score: 1) by khallow on Tuesday December 20 2022, @06:26PM