BTC Markets CEO Caroline Bowler has distributed a public statement on the FTX bankruptcy and its impact on the overall digital asset industry.
BTC Markets is an Australian exchange that says it has set the industry standard for compliance in Australia. Last month, it announced that it had partnered with Chainalysis to incorporate industry-leading compliance policies and anti-money laundering (AML) tools. BTC Markets already utilizes FrankieOne for KYC [know your customer] requirements.
Bowler reflected on FTX’s mismanagement and allegations of misuse of customer funds:
“We have seen over the past week, the misuse of client funds to prop up insolvent organisations. Reports on the collapse of FTX, seem to suggest that it was a strategic decision by their management team, to utilise clients’ funds to support their own proprietary trading desk. The impact is certainly moving through the market. We see the contamination effect filter to other exchanges and platforms, due to the interconnectedness of FTX and their investments.”
Bowler added:
“Industry participants such as BTC Markets have been agitating vocally for increased consumer protections. Post-GFC saw an influx of investor protections and those of us coming from traditional finance, have been self-regulating using these industry best practices. The focus needs to be on regulating human behaviour rather than the underlying technology. Assets such as Bitcoin and Ethereum should not be part of the discussion. Instead, it’s the behaviour of the management who made these erroneous decisions with client funds that needs scrutiny.”
FTX has just commenced bankruptcy proceedings but the aftershocks of its demise will be felt throughout the industry for weeks or months to come.