By Andrei Skvarsky.
The current fraud trial of American cryptocurrency tycoon Sam Bankman-Fried is a “formidable” confidence test for cryptocurrencies as its outcome will show whether those investing in cryptos can expect the same extent of regulatory protection as all other investors, according to a prominent financier.
U.S. federal legislation under which the founder and head of the now-bankrupt crypto exchange FTX is charged is the same as that applying to traditional financial services, Nigel Green, chief executive of global financial consultancy deVere, argued in comments posted on his website, nigel-green.com.
While “critics have long condemned the lack of oversight within cryptocurrency markets and the susceptibility to manipulation”, Bankman-Fried’s trial in Manhattan Federal Court “sends a decisive message on the commitment to equitable and transparent practices”, Green said.
Another reason for the “utmost importance” of the trial is its “possibility of heralding regulatory harmony,” deVere’s chief said in reference to the lack of a uniform global regulatory framework for cryptos, whose decentralisation and freedom from governmental control have made them a paradise for criminals.
“Governments and regulatory bodies around the world are tackling the vital need for consistent, all-encompassing regulations,” Green said.
Bankman-Fried, 31, is charged with fraud and other offences and may face about 110 years in prison if convicted. The trial is set to last six weeks.
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