CEO of FTX digital currency exchange Samuel Bankman-Fried has said 2022 is ripe for introducing the first batch of regulations for the cryptocurrency space.
Speaking to Bloomberg Technology, Fried acknowledged that due to the sector’s complexity, the regulation wouldn’t arrive in a single batch, but the market should expect some activity following years of preparation.
He noted that despite the regulatory outcome resulting in uncertainty for the sector, investors should embrace the move as it is beneficial in the long run.
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Fried believes that the sector might take a hit in the short term, but standard regulation will boost confidence in the space, attracting more investors.
“I don’t think it is going to come as one but, I do think that a lot is happening this year. We’ve already seen a lot happen last year, but a lot of that has been preparatory<…> In the United States, lawmakers are investing heavily in their knowledge of the sector. I think that you’re probably going to see the first batch of it coming out in 2022,” said Fried.
Impact of crypto regulations
With Bitcoin gaining about 60% in 2021, the executive indicated that regulatory clarity should drive optimism among investors for the asset. At the same time, Fried believes that if there is a standard regulatory framework globally, Bitcoin and the general market will likely thrive.
He noted that regulations would also inform the extent to which institutional investors put their money in the crypto space. However, he stressed that institutions would likely invest more in cryptocurrencies but warned that their involvement might stretch over several years.
Fried also revealed that large financial institutions, including banks and pension funds, have begun exploring the sector.
Although the executive has expressed optimism about specific cryptocurrencies, he has previously warned investors about digital currencies to avoid. As reported earlier by Finbold, Fried cautioned against cryptocurrencies driven by social media hype, stating that they crash the hardest.
He also stated that cryptocurrencies with a significant allocation to anonymous founders should be avoided.
Watch the full interview below:
