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Germany Wants Countries to Regulate the Crypto Industry After the FTX and Bankman-Fried Debacle

posted by janrinok on Sunday December 18 2022, @02:23PM   Printer-friendly
from the regulating-self-regulation dept.

upstart writes:

Germany wants countries to regulate the crypto industry after the FTX and Bankman-Fried debacle- Technology News, Firstpost:

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".

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  • (Score: 2, Interesting) by Veyrdite on Sunday December 18 2022, @10:25PM (2 children)

    by Veyrdite (6386) on Sunday December 18 2022, @10:25PM (#1283054)

    Companies that deal with securities are regulated in most countries. Otherwise it's too easy for them to defraud people, especially smaller investors.

    Is crypto different to other securities? I don't think it has any unique features that say it shouldn't be regulated in some way like other securities handling companies are. The only practical reason they have been able to skirt regulation is the fact they are new and fast.

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  • (Score: 2) by c0lo on Monday December 19 2022, @01:12AM (1 child)

    by c0lo (156) Subscriber Badge on Monday December 19 2022, @01:12AM (#1283074) Journal

    Cryptos aren't securities [investopedia.com], they are commodities at best. This is what allowed them to grow with no (or very little) regulations.

    The Howey Test refers to the U.S. Supreme Court case for determining whether a transaction qualifies as an "investment contract," and therefore would be considered a security and subject to disclosure and registration requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. Under the Howey Test, an investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others."

    --
    https://www.youtube.com/@ProfSteveKeen https://soylentnews.org/~MichaelDavidCrawford

    • (Score: 1) by khallow on Monday December 19 2022, @03:32PM

      by khallow (3766) Subscriber Badge on Monday December 19 2022, @03:32PM (#1283152) Journal
      Why should the rest of us consider the Howey test a legitimate measure of what is a security? Notice the second part "and subject to disclosure and registration requirements". Sounds like a typical routing around bad regulation to me.