US Treasury Secretary Janet Yellen spoke at an event organized by The New York Times Dealbook about FTX’s body and crypto exchange and shared her thoughts about the need for regulation, saying that she is having doubts and has a lot of doubts that it Emphasizes the importance of ensuring that crypto assets are sufficient for customer protection and of being open to financial innovations that reduce cross-border transaction costs and are critical to improving financial inclusion are and work for him. He comments on the downturn saying that FTX which filed for bankruptcy on November 11th. That crypto exchange offers owed more than $3 billion to its 50 largest creditors and a million customers and other investors have been through trillions of dollars in losses, which is indeed a complex problem and not at all favorable from a market point of view. . When asked what was the reason for its downfall, he said that according to him whatever has been done by us in the last week and before also it seems that this industries needs adequate regulation which will make necessary reforms in it. and the investors do not have to face any kind of complicated problem. The Treasury Secretary also reveals that the US discusses and is working extensively on cryptocurrency regulations with allies where she identified and flagged significant concerns about crypto and said that the protection of customer assets To see and ensure the security and its overall arrangement and segregation of those assets is the top most priority and it is our absolute responsibility to give utmost importance to this priority.
The FTX implosion was compared by Yellen to the collapse of Lehman Brothers in which the investment bank filed for Chapter 11 bankruptcy in 2008 and saw a massive stock market crash and led to a $700 billion bailout by the US government. where she describes that this is one such moment within crypto that it is so huge that investors are suffering huge losses and clearly it is as disastrous as the collapse of 2008 that we all witnessed. We have been and we are all falling prey to it.
However, according to him, this recession has not yet spread to the banking sectors or the banking sector is not yet a victim of this recession and insists that the banking regulators are very careful about crypto and from moment to moment stay updated.
Earlier this month, Yellen went on to say that the failure of FTX reinforced his view that the crypto market needs much more careful regulation. Is. He also explained that other regulated exchanges will have segregation of client assets and the notion that you can or will be able to use the deposits of clients of an exchange and give them a venture then it makes controlling a risky investment for you. It’s the right time to do it.
Overall Yellen wants to say that according to her the crypto industry needs a regulator which it must be and she compares its dire problem with the problem of 2008. According to him, when the crypto industry is in trouble, then investors and customers bear the maximum loss and this loss is in billions and trillions, which is not right in any way, so for this we need to do some strict treatment. And there is only one solution they see at this time, which is crypto regulation.
