That’s the current thinking of Ron Kruszewski, chairman, and CEO of Stifel, who spoke on the importance of client protection controls and what can be done to rebuild trust in the crypto ecosystem following the collapse of Sam Bankman-FTX Fried’s business.
“Look,” Kruszewski said, “if I were running a crypto fund, I would be sitting in front of you saying we need to assure our customers that putting money in crypto is really no different than putting money in a bank, that we welcome the regulation — how can you have a payment system if you don’t trust that your money will get where it’s supposed to go?”
As it stands, rival firms and industry peers of FTX are scrambling to distance themselves from the reported lax oversight failures that led to FTX’s implosion, including the hiring of outside auditors to provide proof of assets and plans from Binance, the world’s largest cryptocurrency exchange, which is reportedly looking to revamp its entire technical architecture.
“Let’s ask the difficult questions,” Kruszewski said. “These are the ones who are developing the ecosystem; they must ensure that everyone has faith in it.” That’s something I’d want to see.”
Is there a future for cryptocurrency?
“What I find fascinating in all of this,” Kruszewski said, “is that I have yet to see crypto leaders go out and declare ‘we separate our clients’ assets and securities.'” The industry will not move forward unless they can say ‘yes’ to it.”
To that point, Kruszewski believes the industry’s future has been pushed back several years, if not a decade, as a result of FTX’s implosion and its subsequent ripple effects.
“We will not foster excellent invention unless we establish regulations.” “Destructive technology cannot exist in the financial system,” he asserted. “The United States has the most sophisticated, deep, and fair markets in the world because we put good rules and regulations in place, and we need to do that for crypto — and then crypto can flourish and enjoy its true business applications, as opposed to where it currently stands, unregulated, just a casino.”