The CSRC (China Securities Regulatory Commission) believes the crypto sector needs more comprehensive and strict regulations to protect users. In addition, the regulator stated that the latest FTX bankruptcy saga affected the entire crypto community.
Meanwhile, the CSRC regulates and oversees China’s futures and securities sectors. According to the Commission, the FTX collapse occurred due to poor crypto regulations for exchanges.
Furthermore, the CSRC noted that the event was a wake-up call for regulators and policymakers. Besides, the CSRC is allegedly working to strengthen its current regulatory framework.
Government officials and agencies recently argued that crypto regulations should develop as crypto develops. However, following FTX’s bankruptcy filing in the US last month, crypto-related stocks crashed.
The stocks lost the little gains they had accumulated during the bearish market. For example, MicroStrategy, which holds over 130,000 BTC in its crypto vault, saw the value of its shares (MSTR) drop by 10%.
Also, Coinbase, the San Francisco-based crypto firm’s share value (COIN), dipped by 8%. Furthermore, crypto miners Marathon Digital (MARA) and Riot Blockchain (RIOT) saw the value of their shares drop after the filing.
The value of the shares of the crypto-driven bank, Silvergate (SI), also declined by 14%. Furthermore, the two largest cryptos by market cap, BTC and ETH, saw their prices drop by over 6%.
Also, the entire crypto market witnessed similar declines a few hours after FTX filed for bankruptcy.
Hong Kong’s SFC Working On Regulation For Exchanges
The FTX contagion spread through the cryptocurrency sector like wildfire. This forced regulators globally, such as the CSRC and Hong Kong’s SFC (Securities and Futures Commission), to sit up.
Recently, the Legislative Council of Hong Kong passed its Counter-Terrorist Financing and Anti-Money Laundering (Amendment) Bill. In addition, the SFC is reportedly working on regulations for licensed digital asset exchanges.
In addition, the Commission revealed that it would release public consultation for the proposed rules soon. Finally, the agency promised to keep a watchful eye on the crypto sector as it fights to protect the rights and investments of investors.
Furthermore, the Commission claimed that some countries had issued weak regulations for crypto exchanges. However, it argued that Hong Kong’s regulatory framework is very comprehensive and strict.
According to the SFC, regulators should treat crypto exchanges like traditional securities. Per the Commission’s upcoming regulations, crypto exchanges must use a separate account to keep users’ assets.
Also, these virtual asset service providers must submit financial information and audited accounts at regular intervals. Additionally, exchanges must collateralize all issued tokens. The Commission believes these steps would protect investors and prevent another FTX occurrence.
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