FTX Collapse Should Not Be Consider As Failure Of Crypto: EU Deputy Director General

On Wednesday, Deputy Director DG FISMA, Alexandra Jour-Schroeder, in the EU Parliament hearing said the EU doesn’t see FTX as a failure of crypto or blockchain. In addition to this, he blamed SBF for FTX’s collapse.

Notably, the recent bitcoin crash triggered a “crypto winter,” which resulted in the demise of crypto exchange FTX, and on Tuesday this week cryptocurrency lender BlockFi filed for bankruptcy protection. The European Union has agreed on a new groundbreaking market in crypto assets rules (MiCA), which are set to go into effect in 2024, putting the EU at the forefront of regulating a sector that has shrunk dramatically.

EU Deputy Director General shares views over FTX collapse

In a recent tweet cryptocurrency expert Patrik Hansen mentioned the update of the EU Parliament hearing on the FTX collapse and its implications for the EU. While speaking at the EU Parliament hearing Alexandra Jour-Schroeder, deputy director general of the European Commission’s financial services area, stated that it was critical to finalize MiCA certification with a final vote in the European Parliament. She claimed that there were problematic procedures at FTX, including no proper record keeping or separation of client and corporate accounts, and that the bloc included around 10% of the company’s customers.

Deputy Director General demands implementation of MICA

The deputy director general also highlighted the gravity of FTX collapse she stated “We don’t consider them as blockchain or cryptocurrency asset failures per se”. While answering on the question for the requirement of MiCA 2 she responded that the existing rules, which offer significant safeguards for investors and the financial system, should be swiftly approved.

Jour-Schroeder while speaking about the seriousness of FTX collapse said after FTX the tendency to move assets into personal wallet could be increase instead of holding them at exchanges  might increase severe risk.

Apart from that, head of risk analysis, Steffen Kern, at the European Securities and Markets Authority (ESMA), criticizes crypto market as a whole and said there is proof of market manipulation, weak leadership, and a lack of controls. On adding to that he said “This sector of the economy has issues. When it becomes effective, the regulatory framework will be crucial in addressing these problems,”