Researcher compares UFOs to cryptocurrency exchanges

Rupert Schaefer, a top manager at the German Federal Financial Supervisory Authority (BaFin), fears that other bankruptcies will follow the FTX fiasco. He compared unregulated crypto platforms to UFOs.

According to Rupert Schaefer, FTX’s insolvency demonstrated the imperfection of the crypto industry, which can affect the global financial system. According to Schaefer, the situation with FTX has far-reaching consequences, and this exchange is not the first and not the last digital asset trading platform to go bankrupt. The BaFin executive believes that the digital asset industry will only be trustworthy once clear rules for regulating cryptocurrency markets are adopted. Schaefer compared unregulated and unlicensed crypto services to unknown flying objects.

«This is every pilot’s nightmare: unknown aircraft moving in the airspace without identification marks and without radio communication. They do not follow any flight rules, and the safety of passengers is at risk. Therefore, we need orderly air traffic, both in the air and in the cryptocurrency space ,» Schaefer said.

BaFin will only issue a permit to those crypto companies that have a sound business model, with sufficient start-up capital, and whose leaders have earned a good reputation. Bafin takes regulatory standards seriously, the head of the department added.

Coinbase specialists are also convinced that cryptocurrencies need clear regulation. The US government’s current «enforcement-only» approach jeopardizes jobs, innovation, and global leadership. Countries from around the world are increasingly moving forward with responsible cryptocurrency regulation to strategically position themselves as «crypto hubs» — attracting new innovative companies, jobs and revenue, researchers say.

A recent Coinbase study found that one in five adults in the United States owns digital assets — a group that includes 52 million Americans. From the Coinbase survey, it became clear that Americans want changes in the country’s financial system, and cryptocurrency is one of the ways.