FTX Collapse and Subsequent Call for Tighter Regulation Elizabeth・Persons like Senator Warren make it more likely that regulators will adopt even tougher cryptography laws. In Africa, crypto industry participants warn of unintended consequences from hasty and overly restrictive regulation.
The game-changing role of cryptocurrencies in Africa
As the crypto industry continues to grapple with the impact of the collapse of FTX and the resulting loss of confidence, regulators have quickly taken advantage of this incident in support of their call for stricter regulation. Opponents of Bitcoin and decentralized digital assets, such as U.S. Senator Elizabeth Warren, have accused regulators of allowing entities such as FTX to operate outside of regulation.
A complicating issue for crypto enthusiasts who want to lobby against harmful laws is the impression that crypto entrepreneurs are not bound or guided by known codes of conduct. Industry critics believe this lack of rules and ethics is what motivates scammers and scammers with an insatiable appetite for risky transactions to put their customers’ funds to the test.
But when these experiments and gambling don’t pay off, investors often lose everything, and culprits like Sam Bankman-Fried, founder and CEO of FTX, video games. Play Storybook Brawl. He says it helps him “unwind a little.”
Currently, many in the cryptocurrency industry fear that the collapse of FTX will cause regulators around the world to use it as an excuse to introduce a tougher regulatory regime that could stifle innovation. I am afraid that
In Africa, where FTX had a minimal footprint, commentators have used the collapse of crypto exchanges as a valid reason for regulators to refuse to regulate or ban crypto entities outright. I think it is highly likely that This is despite the game-changing role of cryptocurrencies in the remittance and cross-border payments space in Africa.
To understand the perspective of the crypto and blockchain industry in Africa, Bitcoin.com News asked Senator Ihenyen, head of the Nigerian lobby group Stakeholders at the Blockchain Technology Association of Nigeria (SIBAN). We spoke to several industry participants from across the continent, including: Ihenyen said he was right to believe that the global cryptocurrency industry is headed for an era marked by tighter regulations and more skeptical governments.
Tighter regulation leads to less VC funding
But politicians like Warren want tighter regulation I can understand the possibility, but Ihenyen thinks it might not be the best way to go. He explained:
Rather, as I have continued to argue, regulators need to rethink the role of regulation in today’s increasingly decentralized economy. .
Instead of introducing tougher laws, SIBAN bosses said the US Congress, the US Securities and Exchange Commission (SEC), and other regulators would encourage regulation and accountability, security and transparency.
Regarding how tighter regulation of the cryptocurrency industry by US authorities will affect industry players in Africa, Ihenyen said he sees two likely outcomes. The first result is the drying up of venture capital funding “for cryptocurrency projects, especially exchanges and token-based platforms.” A second likely outcome is that U.S. and European Union-based investors “will become more interested in exploring opportunities in the burgeoning retail cryptocurrency market in Africa.” .
BTC “The Financial Lifeline”
Rume Ophi, a crypto enthusiast and educator, told Bitcoin.com News that the collapse of FTX That it is happening very close to home and that his own educational efforts are being affected. Ophi said he had sympathy for affected users, but noted that regulators shouldn’t use this to justify imposing tighter regulations.
“Strict regulation only encourages money laundering,” Orfi argued.
Nathaniel Ruth, Nigeria-based cryptocurrency advocate and author of a book titled Bitcoin is Cash, is another industry voice in Africa and a voice in the United States. Regulators agreed they were being forced to act. However, as he argued in his book, Luz told his Bitcoin.com News that Africans view cryptocurrencies like BTC differently than Westerners do, so regulation The above response must be aware of this fact, he said. He explained:
Bitcoin is a luxury for the West, but a lifeline for Africans. For them they are just assets and stocks, but for us they are our financial lifeblood.
Meanwhile, in a joint response to a question sent by Bitcoin.com News, Crypto Academy Nileone co-founders Daniel Mulondo and Killian Mugenyi urged regulators to take advantage of the situation. I advised them to get involved. With all stakeholders, including educators. To crypto commentators using the FTX collapse as bait, Mulondo and Mugenyi said: The answer is no. This is a failure of exchanges, which are centralized entities. It sadly hurt the industry and definitely slowed down adoption.
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