Despite an uneven year in the crypto markets, many market participants are unperturbed about the long-term health of the sector and say that legal frameworks in 2023 could restore trust in the industry.
“Crypto will recover,” Katherine Dowling, general counsel member at Bitwise Asset Management, said to TechCrunch. “This is not the death of crypto.”
Given the belief by many that crypto remains here to stay, it’s worth looking ahead. Crypto denizens certainly are — after the FTX collapse, questions circulated concerning crypto’s future and what regulators would do next.
“There’s no impetus for regulators to reduce their level of enforcement activity and recent events are likely to embolden them.” Mayer Brown’s Joe Castelluccio
But disappointment in what FTX’s implosion represents is very hard to overstate, Yesha Yadav, professor of law and director of diversity, equity and community at Vanderbilt University, told TechCrunch. “The level of disillusionment and disappointment and sense of feeling deceived by FTX is so deep because it was seen as one of the most compliance-friendly institutions in the crypto economy and one that would be leading the regulatory efforts.”
Now, obviously, FTX is the “poster child for everything that could go wrong,” Yadav said. Its downfall has regulators going back to the drawing board. “They might have to do something different, more far-reaching and strict in response to what happened.”
But, what can we expect from regulators in 2023?
Regulators will finalize some of the proposals they introduced, Alma Angotti, partner and global legislative and regulatory risk leader at Guidehouse, said to TechCrunch. “I think there is a realization that the industry is too big to continue to ‘wait and see.’”