Wed. Dec 4th, 2024

FTX and Binance: How latest crypto scandals could influence public opinion on digital currency regulation<!-- wp:html --><p><a href="https://whatsnew2day.com/">WhatsNew2Day - Latest News And Breaking Headlines</a></p> <div> <div class="article-gallery lightGallery"> <div> <p> Credit: Unsplash/CC0 Public domain </p> </div> </div> <p>True believers in cryptocurrencies have had a rough few weeks. The United States government has just <a target="_blank" href="https://www.nytimes.com/2023/11/21/technology/binance-changpeng-zhao-pleads-guilty.html" rel="noopener">Binance fined</a>—the world’s largest cryptocurrency exchange—$4.3bn (£3.4bn) for its role in money laundering. </p> <p>Forced the company to accept <a target="_blank" href="https://www.programmablemutter.com/p/how-the-feds-bounced-binance?utm_source=profile&utm_medium=reader2" rel="noopener">intrusive monitoring</a> and demanded that his secret boss, Changpeng Zhao, resign and pay a personal fine of $50 million. Zhao, known as CZ, has been called the <a target="_blank" href="https://www.reuters.com/technology/changpeng-zhao-crypto-king-binance-chief-ousted-us-crimes-2023-11-21/" rel="noopener">the most powerful man in crypto</a>. </p> <p>The industry is still reeling from the conviction of Zhao’s bitter rival Sam Bankman-Fried in early November on seven counts of fraud and conspiracy. His company FTX, which was previously the world’s second-largest crypto exchange, collapsed in November 2022. SBF, as it is commonly known, could theoretically face more than 100 years in prison when he is sentenced. <a target="_blank" href="https://www.nytimes.com/2023/11/11/business/dealbook/sam-bankman-fried-sentencing.html#:~:text=The%20maximum%20term%20is%20more,country%2C%20also%20allow%20for%20flexibility." rel="noopener">in March 2024</a>. Various others <a target="_blank" href="https://www.ft.com/content/b95708cd-d4ce-41ce-886a-3c119a7df9a3" rel="noopener">former leading crypto executives</a> They are also under investigation or being prosecuted. </p> <p>Cryptocurrencies just took on the US state, and in the meantime, the result is state power 2: cryptocurrencies 0. After this demonstration of forceful regulation on one side of the Atlantic, what is the future of cryptocurrency regulation? cryptocurrencies in the UK? </p> <p>The UK government has repeatedly <a target="_blank" href="https://www.gov.uk/government/news/government-sets-out-plan-to-make-uk-a-global-cryptoasset-technology-hub" rel="noopener">boasted of his ambition</a> to make the UK a global crypto hub. The new City of London minister, Bim Afolami, <a target="_blank" href="https://www.ft.com/content/3c833ac4-f74d-4663-b144-e1ea6996cadb" rel="noopener">bent</a> in this message shortly after taking office, warning regulators not to overdo it. Speaking at a Financial Times event on global banking, he said: “If you’re regulating a market, in any area, there’s no point in having the safest graveyard.” And then he added: “It’s really important that we don’t brand every cryptocurrency business like FTX or Binance.” </p> <p>This attitude could put Afolami and the government on a collision course with the UK regulator, the Financial Conduct Authority (FCA). Former FCA Chairman Charles Randell <a target="_blank" href="https://www.ft.com/content/723b5753-06e1-4cd8-a629-dd795f9068f2" rel="noopener">recently criticized</a> government plans to treat cryptocurrencies like any other financial investment, saying they risk normalizing cryptocurrencies even though fraud “is a feature, not a bug” of much of the sector.</p> <p> <!-- Google middle Adsense block --> </p> <h2>Changing opinions on financial regulation</h2> <p>The government would say that its point of view is the democratically legitimate one: no one has elected the FCA. But research shows that the British may respond to revelations of irregularities in the sector by wanting to regulate cryptocurrencies more severely. </p> <p>Through <a target="_blank" href="https://banklash.bsg.ox.ac.uk/" rel="noopener">Bank whiplash</a> In a research project, my colleagues and I have studied what happens to public opinion about financial regulation when people are exposed to news about financial scandals, such as the <a target="_blank" href="https://www.bournemouth.ac.uk/news/2020-08-24/opinion-ppi-scandal-far-over-heres-why" rel="noopener">Payment protection insurance scandal</a> in the United Kingdom. We found that in several countries the public has clear opinions about financial regulation and that when they read about scandals, their <a target="_blank" href="https://onlinelibrary.wiley.com/doi/full/10.1111/ajps.12752" rel="noopener">demand for regulatory rigor increases</a>. </p> <p>These changes in public opinion are not simply abstract experimental effects. In a separate article, Harvard professor Taeku Lee and I <a target="_blank" href="https://academic.oup.com/ser/article/20/2/635/5933801" rel="noopener">have shown</a> how a US Congress <a target="_blank" href="https://www.theguardian.com/business/2010/apr/27/goldman-sachs-senate-committee-hearing" rel="noopener">Goldman Sachs research</a> Its role in the global financial crisis drew public attention to the bad practices of large banks and the position of political parties on the matter. In the wake of this explosion of publicity, Republicans abandoned their filibuster. <a target="_blank" href="https://www.nytimes.com/2010/07/16/business/16regulate.html" rel="noopener">the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010</a>Two years after the financial crisis, defending unpopular big banks was not a hill Republicans wanted to die on. </p> <p>We have followed up this research with a study this year into British attitudes towards cryptocurrencies. Our new work, which has not yet been published in an academic journal, suggests that the FCA is more in tune with British public opinion than with the government. Among the four countries we surveyed in March 2023, with responses from more than 36,000 people, British respondents expressed the highest level of support for cryptocurrency regulation. Americans want it the least, while France and Germany fall in the middle. </p> <p>As part of the same study, we also investigated how media coverage of the FTX scandal affected those attitudes. Reading about the scandal caused a significant increase in appetite for regulating cryptocurrencies among Britons, building on an already high base. This is the same effect we found in other areas of financial regulation in our previous research. </p> <h2>Understanding Opinions About Cryptocurrencies</h2> <p>It seems reasonable to expect that recent displays of misconduct by CZ and SBF will lead to a hardening of public attitudes towards cryptocurrency regulation. Even though cryptocurrencies are perceived as an esoteric topic, people have opinions about it. </p> <p>UK politicians would do well to take these views into account when trying to balance demands for regulatory rigor and the economic defense of London’s status as an international financial centre. The US government has flexed its regulatory muscles without worrying about damaging the appeal of its cryptocurrency market, although of course that market is much larger. </p> <p>UK political leaders should not delude themselves into thinking that the general public does not understand these issues. There will be elections next year. And as Bankman-Fried and Zhao discovered, you can fool some people some of the time, but you can’t fool all the people all the time. Even on a topic as seemingly baffling as cryptocurrencies.</p> <div class="d-inline-block text-medium my-4"> <p> Provided by The Conversation<br /> <a target="_blank" class="icon_open" href="https://theconversation.com/" rel="noopener"></a></p> <p> </p> </div> <p class="article-main__note mt-4"> </p><p> This article is republished from <a target="_blank" href="https://theconversation.com/" rel="noopener">The conversation</a> under a Creative Commons license. Read the <a target="_blank" href="https://theconversation.com/ftx-and-binance-how-latest-crypto-scandals-could-influence-public-opinion-on-digital-currency-regulation-218939" rel="noopener">Original article</a>. </p> <p> <!-- print only --></p> <div class="d-none d-print-block"> <p> <strong>Citation</strong>: FTX and Binance: How the latest crypto scandals could influence public opinion on digital currency regulation (2023, December 1) retrieved December 1, 2023 from https://techxplore.com/news/2023- 12-ftx-binance-latest-crypto- scandals.html </p> <p> This document is subject to copyright. Apart from any fair dealing for private study or research purposes, no part may be reproduced without written permission. The content is provided for informational purposes only. </p> </div> </div> <p><a href="https://whatsnew2day.com/ftx-and-binance-how-latest-crypto-scandals-could-influence-public-opinion-on-digital-currency-regulation/">FTX and Binance: How latest crypto scandals could influence public opinion on digital currency regulation</a></p><!-- /wp:html -->

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True believers in cryptocurrencies have had a rough few weeks. The United States government has just Binance fined—the world’s largest cryptocurrency exchange—$4.3bn (£3.4bn) for its role in money laundering.

Forced the company to accept intrusive monitoring and demanded that his secret boss, Changpeng Zhao, resign and pay a personal fine of $50 million. Zhao, known as CZ, has been called the the most powerful man in crypto.

The industry is still reeling from the conviction of Zhao’s bitter rival Sam Bankman-Fried in early November on seven counts of fraud and conspiracy. His company FTX, which was previously the world’s second-largest crypto exchange, collapsed in November 2022. SBF, as it is commonly known, could theoretically face more than 100 years in prison when he is sentenced. in March 2024. Various others former leading crypto executives They are also under investigation or being prosecuted.

Cryptocurrencies just took on the US state, and in the meantime, the result is state power 2: cryptocurrencies 0. After this demonstration of forceful regulation on one side of the Atlantic, what is the future of cryptocurrency regulation? cryptocurrencies in the UK?

The UK government has repeatedly boasted of his ambition to make the UK a global crypto hub. The new City of London minister, Bim Afolami, bent in this message shortly after taking office, warning regulators not to overdo it. Speaking at a Financial Times event on global banking, he said: “If you’re regulating a market, in any area, there’s no point in having the safest graveyard.” And then he added: “It’s really important that we don’t brand every cryptocurrency business like FTX or Binance.”

This attitude could put Afolami and the government on a collision course with the UK regulator, the Financial Conduct Authority (FCA). Former FCA Chairman Charles Randell recently criticized government plans to treat cryptocurrencies like any other financial investment, saying they risk normalizing cryptocurrencies even though fraud “is a feature, not a bug” of much of the sector.

Changing opinions on financial regulation

The government would say that its point of view is the democratically legitimate one: no one has elected the FCA. But research shows that the British may respond to revelations of irregularities in the sector by wanting to regulate cryptocurrencies more severely.

Through Bank whiplash In a research project, my colleagues and I have studied what happens to public opinion about financial regulation when people are exposed to news about financial scandals, such as the Payment protection insurance scandal in the United Kingdom. We found that in several countries the public has clear opinions about financial regulation and that when they read about scandals, their demand for regulatory rigor increases.

These changes in public opinion are not simply abstract experimental effects. In a separate article, Harvard professor Taeku Lee and I have shown how a US Congress Goldman Sachs research Its role in the global financial crisis drew public attention to the bad practices of large banks and the position of political parties on the matter. In the wake of this explosion of publicity, Republicans abandoned their filibuster. the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010Two years after the financial crisis, defending unpopular big banks was not a hill Republicans wanted to die on.

We have followed up this research with a study this year into British attitudes towards cryptocurrencies. Our new work, which has not yet been published in an academic journal, suggests that the FCA is more in tune with British public opinion than with the government. Among the four countries we surveyed in March 2023, with responses from more than 36,000 people, British respondents expressed the highest level of support for cryptocurrency regulation. Americans want it the least, while France and Germany fall in the middle.

As part of the same study, we also investigated how media coverage of the FTX scandal affected those attitudes. Reading about the scandal caused a significant increase in appetite for regulating cryptocurrencies among Britons, building on an already high base. This is the same effect we found in other areas of financial regulation in our previous research.

Understanding Opinions About Cryptocurrencies

It seems reasonable to expect that recent displays of misconduct by CZ and SBF will lead to a hardening of public attitudes towards cryptocurrency regulation. Even though cryptocurrencies are perceived as an esoteric topic, people have opinions about it.

UK politicians would do well to take these views into account when trying to balance demands for regulatory rigor and the economic defense of London’s status as an international financial centre. The US government has flexed its regulatory muscles without worrying about damaging the appeal of its cryptocurrency market, although of course that market is much larger.

UK political leaders should not delude themselves into thinking that the general public does not understand these issues. There will be elections next year. And as Bankman-Fried and Zhao discovered, you can fool some people some of the time, but you can’t fool all the people all the time. Even on a topic as seemingly baffling as cryptocurrencies.

Provided by The Conversation

This article is republished from The conversation under a Creative Commons license. Read the Original article.

Citation: FTX and Binance: How the latest crypto scandals could influence public opinion on digital currency regulation (2023, December 1) retrieved December 1, 2023 from https://techxplore.com/news/2023- 12-ftx-binance-latest-crypto- scandals.html

This document is subject to copyright. Apart from any fair dealing for private study or research purposes, no part may be reproduced without written permission. The content is provided for informational purposes only.

FTX and Binance: How latest crypto scandals could influence public opinion on digital currency regulation

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