According to an executive at EY, crypto’s price fluctuations no longer have a significant impact on the industry’s growth over the long term. This is the first time in history that this has been the case. Nevertheless, he emphasized: Regulators must also take swifter and more severe action against obvious Ponzi schemes.
In an interview that was published on Thursday by the Mint publication, Paul Brody, the global blockchain leader at EY, talked about the crypto winter, the need for regulation, and the collapse of the cryptocurrency exchange FTX.
He was asked when he thought the crypto winter would be over. He responded, “This crypto winter is much milder than the previous one. “The fact that there is a decoupling taking place between the cryptocurrency industry’s product and engineering development work and the price of crypto assets is one of this winter’s most notable features. The executive at EY stated:
Price fluctuations no longer have a significant impact on the industry’s long-term growth for the first time ever. We are gradually moving away from the industry’s sole focus on money.
He added that application development, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs) are now much more prominent in the Ethereum ecosystem.
Brody on FTX Collapse and the Need for Crypto Regulation The executive at EY also talked about the collapse of the cryptocurrency exchange FTX, which has been compared to Ponzi schemes, including the notorious one run by Bernie Madoff, by some.
He cautioned in response to a question regarding whether users can trust crypto exchanges following the FTX meltdown: The idea behind cryptocurrency was that because it was stored on a blockchain, you could see if something bad happened to it. That theory was flawed. You cannot comprehend the intricate data flow in smart contracts simply by seeing data.
Brody went on to say, “The ones that are not doing well are the entities that have tried to blend on-chain and off-chain financial transactions without robust regulatory oversight.”
The head of the EY blockchain warned, “It’s been impossible to know if your assets are strictly being held and used for you, or if they are being pledged and used in other scenarios.”The most important thing to remember is that your governance needs to be either straightforward enough for people to follow or it can be rigorously audited and publicly traded.
Additionally, he emphasized the necessity of tighter regulations, stating:
Controllers must get serious about clear Ponzi plots quicker and with greater seriousness.I’d like to see more rules that good players can follow and regulatory activity.
Numerous individuals have demanded that regulators in various jurisdictions tighten their oversight since the collapse of FTX. This week, Sir Jon Cunliffe, Deputy Governor for Financial Stability at the Bank of England, emphasized that the FTX collapse has demonstrated the urgent requirement for tighter regulation.
A number of senators and the White House have called for proper crypto oversight. The Securities and Exchange Commission (SEC) was recently urged to act decisively to regulate the cryptocurrency industry.