JPMorgan Expects Major Changes Coming to Crypto Industry and Regulation Post FTX Collapse – Regulation Bitcoin News

JP Morgan has outlined the major changes expected in the crypto industry and its regulation following the demise of crypto exchange FTX. Global investment banks envision several new regulatory initiatives, including those focused on custody, client asset protection, and transparency.

JP Morgan Anticipates Major Changes in Crypto Industry After FTX Meltdown

Global investment bank JP Morgan released a report on Thursday outlining major changes expected to occur in the cryptocurrency industry following the collapse of crypto exchange FTX.

Global strategist Nikolaos Panigirtzoglou said, “The failure of FTX and its sister company Alameda Research not only caused a chain of crypto entity failures and suspensions of withdrawals, but also investors seeking disclosure of crypto entities. It is likely to increase regulatory pressure,” he said. More information about their balance sheet. “

Panigirtzoglou listed the main changes JP Morgan expects after the FTX meltdown. First, he writes:

Existing regulatory initiatives already underway may be brought forward.

JP Morgan strategists Cryptocurrency market The (MiCA) bill will receive final approval by the end of the year, and the regulation is expected to enter into force at some point in 2024.

Regarding the United States, he explained: Terra’s Fall” adds:

Our guess is that there will be even more urgency following the collapse of FTX.

“A major debate among U.S. regulators centers on classifying cryptocurrencies as securities or commodities,” continued Panigirtzoglou.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said: Bitcoin is a commodity Whereas most other crypto tokens are Securities. but, some invoices It was introduced into Congress to make the Commodity Futures Trading Commission (CFTC) the primary regulator of crypto assets.

JP Morgan also envisions:

Similar to the traditional financial system, new regulatory initiatives may emerge focused on custody and protection of customers’ digital assets.

Noting that many retail cryptocurrency investors are already using hardware wallets to self-store their cryptocurrencies, the strategist explains: Or crypto exchange. “

Then, “new regulatory initiatives are likely to emerge, focused on separating brokerage, trading, lending, clearing and custody activities, similar to the traditional financial system,” the JPMorgan report added. He said:

This separation will most affect exchanges like FTX, which combine all these activities to raise issues regarding customer asset protection, market manipulation, and conflicts of interest.

Additionally, “new regulatory initiatives are likely to emerge focused on transparency that will mandate regular reporting and auditing of reserves, assets and liabilities across major crypto entities,” JP Morgan strategists detail. did.

Another major shift identified by the investment bank is that “the crypto derivatives market is likely to move to a regulated location with CME emerging as the winner.”

Panigirtzoglou also discussed decentralized exchanges (DEX), noting that decentralized finance (defi) faces several hurdles before it becomes mainstream. “For large institutions, DEXs are typically not sufficient for large orders because transaction speeds are slow or trading strategies and order sizes are trackable on the blockchain,” said a JP Morgan strategist. says.

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Do you agree with JP Morgan’s analysis? Let us know in the comments section below.

Kevin Helms

An Austrian economics student, Kevin has been an evangelist since he discovered Bitcoin in 2011. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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