Global blockchain leader EY claims that for the first time ever, crypto price swings don’t have such a big impact on the industry’s long-term growth. Nonetheless, he stressed, “It’s also important that regulators crack down faster and tougher on obvious Ponzi schemes.”
EY’s Brody on Crypto Winter
Paul Brody, global blockchain leader at EY, discussed the crypto winter, the need for regulation, and the collapse of crypto exchange FTX in an interview published by Mint publication on Thursday.
He was asked if he expects the current crypto winter to end soon. “It’s a much milder crypto winter than the last,” he replied. “One of the key features of this winter is that there is a decoupling between the price of crypto assets and the product development and engineering work that takes place in the crypto industry.” The EY executive said:
For the first time ever, price increases and decreases do not have such a large impact on the long-term growth of the industry. We are slowly moving away from the purely financial orientation of the industry.
He added that the Ethereum ecosystem is now much more focused on application development, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).
Brody on the collapse of FTX and the need for crypto regulation
The EY executive also discussed the collapse of crypto exchange FTX, which some have likened to Ponzi schemes, including the infamous one run by Bernie Madoff.
Responding to a question about whether users can trust crypto exchanges after the collapse of FTX, he warned: “The idea behind crypto was that it is completely transparent since it is on the blockchain and you can see if something bad happened. It was a flawed theory. Seeing the data does not mean you can understand the complex data flow in smart contracts. »
“Entities that have tried to mix on-chain and off-chain financial transactions without strong regulatory oversight are the ones that are not doing well,” Brody continued.
“It has been impossible to know if your assets are strictly held and used for you, or if they are pledged and used in other scenarios,” the EY blockchain leader warned. “The key to remember is that your governance should either be simple enough for people to follow, or you can take a rigorously audited and publicly traded approach.”
He also highlighted the need for stricter regulation, saying:
It’s also important that regulators crack down faster and tougher on obvious Ponzi schemes. I would like to see more regulatory activities and rules that good players can follow.
Following the collapse of FTX, many people called on regulators in various jurisdictions to step up their oversight. Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe stress this week that the collapse of the FTX has highlighted the urgent need for stricter regulation. The White House and several US senators have called for proper crypto monitoring. A US lawmaker recently urged the Securities and Exchange Commission (SEC) to take decisive action to regulate the crypto industry.
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