At our TC Sessions: Crypto event last week in Miami, I sat down with Bitwise Asset Management General Counsel and Chief Compliance Officer Katherine Dowling, Perkins Coie Partner Sarah Shtylman and Paradigm Policy Director Justin Slaughter to talk about the crypto regulation landscape, with a specific focus on the U.S. What we didn’t know heading into the panel was just how much would change about the industry owing to the fallout from FTX’s collapse the week prior.
Slaughter in particular felt the impacts of the FTX fiasco firsthand: Paradigm wrote down a $278 million investment in the exchange following its declaration of bankruptcy. We talked about that up front, but mostly as a jumping-off point to discuss the knock-on effects for the state of regulation, which was itself already a contentious mess, particularly when it comes to U.S. lawmakers and the various federal regulators involved in the market, including the SEC and the CFTC.
The key takeaways that all three panelists essentially agreed upon is that the benefit of the FTX situation is that there’s now more impetus than ever to arrive at some kind of regulatory framework specific to crypto in the U.S., and that there’s now ample demand from the industry side, as well as an opportunity to further educate regulators since they’re looking for illumination coming out of the FTX collapse. On the incentive side, there’s harm reduction, since regulators and lawmakers don’t want more FTX scenarios to continue to unfold, as well as FOMO on the business being done abroad in markets where they’ve raced ahead to encourage crypto adoption.
Check out the full panel above for much more.