FTX collapse spurs ‘jaw-dropping’ financial losses – what’s next for crypto? | Personal Finance | Finance

Daniel Seely, financial services regulatory lawyer and crypto expert at Freeths, said: “The market has had many downturns over the last 10 years but crypto has managed to bounce back on many occasions.

“The recent issues are more to do with the collapse and failures of an exchange, rather than a specific cryptocurrency itself. Arguably, the recent issues with FTX may strengthen feelings among more passionate cryptocurrency supporters of the need for crypto to be decentralised and not rely on exchanges such as FTX – ‘not your keys, not your crypto’ is the common saying.”

Nabil Manji, SVP/GM and head of crypto and Web3 at Worldpay from FIS added that while he expects the recent events and their fallout will continue to challenge the industry for some time, it won’t be like this for too long.

He told Express.co.uk: “We’re confident that the industry ‘won’t let a good crisis go to waste’, and are already seeing some notable improvements, in terms of the increased pace of regulatory development, which is helping to drive clarity in the market; increased and irreversible emphasis on risk management by key industry players; a weeding out of poorly-managed players; and an overall sense of industry unity and purpose that is more professional in nature.

“There is no doubt that the recent events have made the road ahead more challenging and elongated, however, we expect these improvements to yield long-term benefits to the industry as a whole.”

A common key issue raised by the experts was the effectiveness of cryptocurrency security.

Mr Janczewski said: “The truth is that crypto security and investor protection in digital assets is still very rudimentary but, as regulators set resolutions to tackle the ‘Wild West’ in 2023, they hold the key to market recovery.

“The industry needs to realise that it is now imperative to build more security into every facet of its operations to prevent these instances of digital theft, such as implementing digital asset protection technology, to instil confidence in the market again. Only then will more people embrace crypto.”

Lars Seier Christensen, chairman of Concordium and founder of Saxo Bank, said the FTX collapse “underlines the need for more regulation in the crypto space that has much to offer.”

He continued: “Every story like this scares away serious companies from getting involved in the many excellent use cases around blockchain, that can improve the data security, structure and processes of nearly any company handling data in their business – in other words, nearly all businesses.

“But as long as the industry is surrounded by so much uncertainty, it is difficult to see the really big players getting involved, irrespective of all the benefits it could bring them. Regulation would help dissipate the fog and there are excellent projects out there built to support a more regulated environment.”

According to Mr Ashmore, there is “one way” people can serve their crypto assets “with 100 percent safety”, and this is through cold storage.