Wally Adeyemo Calls for Crypto Regulation
US Deputy Treasury Secretary Wally Adeyemo has emphasized the need for the United States to collaborate with other countries to develop cryptocurrency regulations effectively.
This development comes a few weeks after FTX, the second most popular crypto exchange, based in the Bahamas, became insolvent. CEO Sam Bankman-Fried declared that the protocol did not have sufficient assets to meet customers' demands.
Speaking at the Reuters NEXT conference, Adeyemo said countries must enact regulatory laws to protest investors, promote financial stability, and block illicit crypto users.
"This is a global phenomenon," Adeyemi said. He added that the US would work closely with international partners to design a regulatory framework to protect the global economy, especially with crypto innovations.
The Deputy Treasury Secretary noted that since FTX was not based in the US, regulatory efforts must be broadened.
Crypto regulation post-FTX collapse
FTX declared insolvency and Bankman-Fried resigned from his position as CEO on 11 November, a few days after the world's biggest crypto exchange, Binance, dumped a deal to rescue the exchange. This was followed by angry traders pulling $6 billion out.
As a result, Rostin Behnam, chairman of the Commodity Future Trading Commission (CFTC), urged lawmakers on Thursday to quickly design a regulatory framework for crypto assets.
After several congressional hearings to examine the collapse of FTX, members of the Senate Agriculture Committee asked Behnam if the FTX collapse would have been controlled with better oversight.
However, the recent setback in the crypto market has not affected the banking sector. This is according to Janet Yellen, the US Treasury Secretary, who remains skeptical about the crypto industry. She believes in the need for adequate regulation.
While speaking at the DealBook event hosted by New York Times, the Treasury Secretary said adequate customer protection is needed in the crypto sector.
Just like Wally Adeyemo, she agrees that it is important to remain open to financial innovations, given that cryptocurrencies can lower the cost of cross-border transactions and promote financial inclusion.
"I have been skeptical, and I remain quite skeptical," Yellen said. She noted that recent developments are not centered on financial inclusion and cross-border payment.
Author: Lucy Adegbe
Lucy is a crypto enthusiast that finds unique interest in writing as means to not only promote knowledge but also change the world. With focus in crypto and personal finance, she aims to become a respected voice in these industries through writing.