Following the failure of cryptocurrency exchange FTX, JPMorgan has outlined significant changes it anticipates for the regulation of the cryptocurrency business.
A number of new regulatory efforts, including those emphasizing custody, customer asset protection, and transparency, are planned by the international investment bank.
Post-FTX Meltdown, JPMorgan Predicts Significant Changes in the Crypto Industry
Following the demise of cryptocurrency exchange FTX, global investment bank JPMorgan released a report on Thursday outlining significant changes it anticipates taking place in the cryptocurrency industry.
There will probably be new regulatory initiatives that concentrate on the custody and protection of customers’ digital assets, just like in the conventional banking system.
The expert stated: “The primary benefactors post FTX crash are institutional crypto custodians… Many retail cryptocurrency investors have already shifted to self-custody their cryptocurrencies utilizing hardware wallets… These reputable custodians will probably gain ground on the comparatively smaller crypto-native custodians or crypto exchanges over time.
The JPMorgan report then continues, stating that “New regulatory initiatives are likely to emerge focusing on unbundling of broker, trading, lending, clearing, and custody activities as in the traditional financial system,” noting that this unbundling will have the greatest effects for exchanges because, like FTX, they combined all these activities, raising concerns about customers’ asset protection, market manipulation, and conflicts of interest.
In addition, the JPMorgan strategist stated that “New regulatory initiatives are likely to emerge focusing on transparency mandating regular reporting and auditing of reserves, assets, and liabilities across major crypto entities.”