• The European Union is set to provide a final vote on the Markets in Crypto-Assets (MiCA) regulation proposal.
  • FTX contagion led to the crypto lending platform BlockFi filing for bankruptcy.
  • BlockFi also sued FTX’s founder Sam Bankman-Fried for holding Robinhood shares pledged as collateral.

FTX’s downfall impacted the crypto market not just financially but also brought regulatory concerns to a new height. With every passing day, more and more lawmakers are demanding crypto regulation, with the most recent addition calling upon the European Union to take appropriate actions.

FTX collapse to make crypto space safer

FTX’s bankruptcy came days after the crypto exchange and its native token, FTT, imploded. This led to one of the biggest crashes noted in the history of the crypto market, the aftershocks of which can still be felt. Regarding the same, the Chair of the Economic and Monetary Affairs Committee of the European Parliament, Irene Tinagli, shared her concerns. In an interview with Bloomberg, the lawmaker stated,

“We need to be very carefully monitoring what is going on, and try to put in place regulation that would prevent that to blow up out of proportion and to become a systemic threat.”

Suggesting appropriate regulations, Tinagli called upon the European Union to step their crypto monitoring up. This would enable them to prevent a crisis like the collapse of FTX, which could have an impact on the broader market.

However, the European Union is yet to implement regulations for the space. The closest the EU is to present regulations is through the Markets in Crypto-Assets or MiCA proposal, which is set for a final vote in February 2023. If approved, MiCA would look upon addressing service providers’ supervision, consumer protection and environmental safeguards from energy-intensive cryptocurrencies such as Bitcoin.

BlockFi files for bankruptcy and sues SBF over collateral

FTX collapse’s blowback continues to impact crypto companies, with BlockFi emerging as the newest addition to the list. The crypto lender filed for Chapter 11 bankruptcy on Monday, the same as FTX, following the suspension of withdrawals. As per the press release, BlockFi will be taking this time to restructure the company and continue operations as it has over 100,000 creditors. 

In addition to this, BlockFi also sued the former CEO of FTX, Sam Bankman-Fried’s (SBF) Emergent Fidelity Technologies, to seize Robinhood Shares that the FTX founder allegedly pledged as collateral to BlockFi.

According to an FT report, BlockFi and Emergent Fidelity Technologies reached an agreement on November 9 to guarantee the payment of a borrower – that, according to legal correspondence, turned out to be Alameda Research – by pledging Robinhood’s shares as security. 

BlockFi also claims its exposure to SBF and associated companies ultimately triggered the company’s breakdown as Alameda Research defaulted on $680 million of collateralized loans in early November.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

MakerDAO whales sold over $9 million in tokens, MKR price takes a hit

MakerDAO whales sold over $9 million in tokens, MKR price takes a hit

MakerDAO whales sold over 3,000 MKR tokens in the past day. Maker supply on exchanges climbed between April 20 and Monday. MKR price declined by nearly 2% on Monday. 

More Maker News

XRP rallies past $0.50 as Ripple prepares for response to SEC requirement for $2 billion in penalty

XRP rallies past $0.50 as Ripple prepares for response to SEC requirement for $2 billion in penalty

Ripple prepares to file the opposition brief against the SEC on Monday. Ripple will respond to the SEC’s demand for $2 billion in fines requested in its remedies-related opening brief.

More Ripple News

Crypto AI token comeback likely after Apple's potential on-device LLM

Crypto AI token comeback likely after Apple's potential on-device LLM

Artificial Intelligence (AI) crypto tokens Render (RNDR), Bittensor Tao (TAO), The Graph (GRT), AIOZ Network (AIOZ), Golem (GLM), OriginTrail (TRAC) and RSS3 (RSS3) prices rally on Monday. 

More Cryptocurrencies News

Enjin Coin provides high-reward, low-risk buy-the-dip opportunity Premium

Enjin Coin provides high-reward, low-risk buy-the-dip opportunity

Enjin Coin (ENJ) price has been on a downtrend since the 2021 peak and shows signs of slowing down. The more than 50% crash noted in the past four weeks suggests a potential buy-the-dip opportunity. 

More Cryptocurrencies News

Bitcoin: BTC post-halving rally could be partially priced in Premium

Bitcoin: BTC post-halving rally could be partially priced in

Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days? 

Read full analysis