During the recent FTX hearing on November 30, decision-makers put more pressure on the European Parliament to fast-track the comprehensive implementation of the new crypto regulations following the dramatic collapse of the FTX ecosystem.
The dramatic crash of FTX and its sister firm, Alameda Research, has been the subject of debate during the recent hearing on the collapsed crypto service provider by EU policymakers.
Members of the European Parliament’s economic committee stressed that cryptocurrency and its underlying technologies are not to blame for the spectacular fall of FTX. However, policymakers are still determining the suitability of the Market in Crypto Assets (MiCA) bill to address emerging issues in the crypto industry.
It is worth noting that the EU Parliament postponed the final vote to implement the proposed crypto regulations to February 2023.
According to the deputy head of the monetary unit of the European Commission, Alexandra Jour-Schroeder, no firm active within the EU bloc would attempt to engage in the activities FTX is alleged to have done.
The Sam Bankman-Fried founded crypto exchange witnessed a shocking crash of its native coin, the FTT. The sudden collapse of the token impacted millions of customers and sent the crypto ecosystem into another downward spiral.
Also read:Accordingly, FTX, with a valuation of $32 billion at the start of 2022, filed for bankruptcy protection in the United States on November 11. Due to the massive impact of the fallout, regulators around the world seek answers as to the reason for the unexpected failure.
Stefan Berger, the EU Parliament’s lead negotiator on the MiCA regulations, stated:
“The recent happening is not a result of a flaw of the basic blockchain technology, the crypto community, or the market model.” The issue was triggered by the behavior and ego of one individual—Sam Bankman-Fried, the founder of FTX and Alameda Research”.
A Visible Weakness in the Crypto Space
Steffen Kern, the EU’s head of risk analysis, revealed that the entire crypto space has an apparent weakness that regulators ignored before the recent disaster. Kern added that the European Securities and Markets Authority (ESMA) would continue to issue investment warnings to consumers in the crypto industry.
However, some left-wing lawmakers aggressively approached the issue during the hearing.
MEP Aurore Lalucq’s call on the European Commission asked whether the body can confidently tell the world if Binance could not go bankrupt despite being registered in Europe. As a result, another MEP, Ernest Urtasun, is doubtful if the new MiCA bill would have seen the imminent collapse of FTX and prevented it.
MiCA’s implementation appears to be a high-priority action for European policymakers, and the bill’s acceleration is now the central area of focus. Meanwhile, the EU regulators are yet to catch up with their counterparts in the US, where the FTX debacle is on the priority agenda of lawmakers.
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