Syed Rahman warns against rushing to regulate cryptocurrency after FTX’s collapse

With the high-profile problems of cryptocurrency exchange FTX attracting attention from the authorities, Syed Rahman wrote about the dangers of making any quick moves to regulate the sector.

His piece details the issues that have been discovered at FTX since it collapsed, with billions unaccounted for, FTX plus 130 associated companies in liquidation and law enforcement interest from a number of countries.

He makes it clear that those who believe there should be more regulatory oversight of cryptocurrencies are likely to cite FTX’s problems to support their argument. But he emphasises that any action taken regarding the cryptocurrency sector needs to be considered carefully.

Syed argues that any quick reaction to FTX’s problems or the adoption of a one-size-fits-all approach could be damaging to the crypto sector. Any regulation that removes the sector’s creativity would do more harm than good.

He also explains the danger of new crypto legislation having a negative effect on the wider economy, as it may give an opportunity to those in traditional finance to sidestep existing financial regulation.

Syed’s article features in The Global Legal Post.