• Laura Navaratnam, former head of fintech at the U.K. Financial Conduct Authority, examines how various regulatory initiatives are expanding oversight of the crypto industry.
• 2021 saw the crypto market reach an all-time high, but 2022 has seen painful lows with the market dropping to a third of its value from the previous year.
• Navaratnam discusses the implosion of the Terra stablecoin ecosystem, the bankruptcies of Three Arrows Capital, Celsius Network, Voyager Digital, and BlockFi, and the influence of FTX on the crypto space.
The cryptocurrency industry has experienced some turbulent periods over the past few years, with 2021 and 2022 being no exception. Towards the end of 2021, the crypto market was at an all-time high, reaching an impressive market cap of $3 trillion. This year, however, the crypto market has sunk to less than a third of its value from the previous year.
In light of the recent volatility in the crypto market, several regulatory initiatives are underway to expand oversight of this nascent industry. Laura Navaratnam, director of Gattaca Horizons and the former head of fintech at the U.K. Financial Conduct Authority (FCA), examines the potential implications of these regulatory efforts.
Navaratnam points out that the crypto market in 2022 has witnessed some seismic events, such as the implosion of the Terra stablecoin ecosystem and the bankruptcies of Three Arrows Capital, Celsius Network, Voyager Digital, and BlockFi. Additionally, the influence of the FTX exchange has been felt across the crypto space, with the exchange’s token becoming the fourth-largest asset by market cap.
Navaratnam believes that these regulatory initiatives could lead to greater clarity and better consumer protection in the crypto space. She envisions a future where cryptocurrencies are treated more like traditional assets, with governments and regulators providing clear guidance on how to buy, sell, and store them. Additionally, Navaratnam suggests that there should be more clarity on the taxation of cryptocurrencies, as well as a framework for how crypto businesses should operate in order to be compliant with local laws.
Overall, Navaratnam believes that the regulatory initiatives currently underway in the U.S., U.K., and Europe could have a positive impact on the crypto industry. These initiatives could help foster trust in cryptocurrencies and provide greater protection for users, which could lead to increased adoption and use of crypto assets.