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Top Bank of England official warns of 'largest failure' to date in crypto space

A top Bank of England official has warned that the collapse of cryptocurrency exchange FTX is the 'most spectacular failure' in the crypto ecosystem.

Top Bank of England official warns of 'largest failure' to date in crypto space
Published Nov 22, 2022 1:04 AM CST
2 minutes & 0 seconds read time

The collapse of what was the world's second-largest cryptocurrency exchange has shaken the entire cryptocurrency space, with warnings now coming out from officials at the Bank of England.

Former FTX CEO Sam Bankman-Fried

Former FTX CEO Sam Bankman-Fried

According to Jon Cunliffe, the Bank of England's deputy governor for financial stability, who spoke at a conference at Warwick Business School this past Monday, the collapse of Sam Bankman-Fried's FTX exchange is an indicator that the cryptocurrency space is in dire need of regulation before it grows to the point of being able to impact the global financial system.

Notably, Cunliffe said that at the moment, cryptocurrency isn't large enough to threaten the stability of the financial system, but it's fast-growing, and "its links with mainstream finance have been developing rapidly." Furthermore, the top bank official said that lawmakers "should not wait" to develop the laws "necessary to prevent a crypto shock that could have a much greater destabilizing impact."

Cunliffe described the collapse of FTX as "probably the largest - and certainly the most spectacular - failure to date in the crypto ecosystem."

Lastly, the UK's Financial Conduct Authority (FCA) declared on the September 16 that FTX was operating in the UK without authorization, which led the financial watchdog to warn users that they "are unlikely to get your money back if things go wrong."

"This firm is not authorised by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong," wrote the FCA.

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Jak joined the TweakTown team in 2017 and has since reviewed 100s of new tech products and kept us informed daily on the latest science and space news. Jak's love for science, space, and technology, and, more specifically, PC gaming, began at 10 years old. It was the day his dad showed him how to play Age of Empires on an old Compaq PC. Ever since that day, Jak fell in love with games and the progression of the technology industry in all its forms. Instead of typical FPS, Jak holds a very special spot in his heart for RTS games.

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