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With the fall of FTX, “safety standards will be mandatory”: regulatory expert

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Key facts:
  • Vallejo: “Regulation will be the name of the game in 2023.”

  • With the collapse of FTX, he argues that “it will be mandatory to have minimum safety standards.”

Felipe Vallejo, regulatory director of cryptocurrency exchange Bitso, shared with CryptoNews his perspectives on the current state of the industry. Especially after the failure of the large FTX exchange, which prevented its users from withdrawing their balances and led to the exit of the market due to distrust, dragging prices down.

As a specialist in regulatory issues for cryptocurrenciesVallejo told us that he believes “regulation will be the name of the game in 2023,” in the face of FTX’s failure. In this context, he considered that “it won’t even be optional anymore” whether or not the regulator should intervene. intervention in the sector.

Vallejo indicates that the world is moving toward a regulatory framework that avoids crises like the FTX crisis, but it is still a work in progress. He indicated that, for example, laws on the subject are already being discussed in the United States and there is a presidential order that says “we have to issue regulations on cryptocurrencies.”

He also noted that MiCathe EU’s new cryptoasset law, which needs to define the technicalities, is up for a vote in February. Meanwhile, he mentioned that an ecosystem bill is being discussed in Brazil, as well as in other parts of the world.

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“So I think it will be mandatory to have minimum security standards,” he said based on his experience as Bitso’s director of regulation. And he noted. as an industry you have to be close to the regulator to influence the adequacy of those standards.

Bitso believes that regulation should be standardized globally.

At CryptoNews, we asked Vallejo which countries he thinks are adopting the best cryptocurrency regulation policies. And, reflecting on this, he replied that. The Brazilian Congress is debating a bill. which it considers “very good” for the ecosystem.

He noted that “all countries in the world should look at this situation.” such a project. Precisely because, rather than being prescriptive, it stipulates exactly how to comply, is based on normative principlesfrom cybersecurity to consumer protection and even money laundering.

He argued that other places could adopt this proposed model. “One thing we would like, at least at Bitso, is for regulations globally to be similar,” he confessed. “You don’t want to create a very fragmented system with different rules everywhere, because this is a global network,” he added.

“It is in the interest of the industry to have as much globally standardized regulation as possible. Now, this is very difficult because every country has different use cases, different risks, different histories….”

Felipe Vallejo, director of regulation for the Bitso cryptocurrency exchange.

Bitso could not confirm whether it has custody of El Salvador’s bitcoins.

We also asked Vallejo in the interview whether Bitso has custody of bitcoins in El Salvador. bitcoin (BTC) from El Salvador, to which he replied “no comment.” And, without denying or confirming, he added that due to issues of security of funds are unable to provide this information in this context.

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Therefore, this doubt in the ecosystem that arose more than a year ago, in September 2021, continues. Just as Bitso tweeted “thank you for your purchase, Mr. President.” This was in response to the announcement of the first purchase of BTC by Nayib Bukele, the president of the Central American country that adopted bitcoin as legal tender.

In turn, doubt grew days after that comment when the exchange announced that it would be a provider of Chivo Wallet, the money exchange. wallet bitcoin wallet created by the Salvadoran government. However, since then, neither Bitso nor Bukele have confirmed. whether this exchange is responsible for the custody of El Salvador’s bitcoins.

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