US elections in the midst of a crypto storm

Posted Nov 9, 2022, 11:56 AMUpdated Nov 9, 2022, 12:15 PM

Coincidentally, the midterm election in the United States comes at the same time as a storm for digital assets: one of the main exchange platforms, FTX, is going through an unprecedented crisis, “probably the most important event in crypto history”, according to Clara Medalie, director of research at analyst firm Kaiko. FTX could nevertheless get away with a takeover by Binance, its competitor. “This will change the structure of the market and create monopoly issues”, adds Clara Medalie. Perhaps one of the new themes that American elected officials will tackle, even if “Cryptocurrencies are not at the top of their priorities”.

This is a political blow all the harder because “everyone in Washington knew Samuel Bankman-Fried, a major donor to the Democratic Party”. His downfall lastingly tarnishes the reputation of the industry and destroys its lobbying efforts.

Elected officials will continue to legislate on crypto

The results of midterms arrived – and still incomplete – draw a very divided Congress, this should not however prevent elected officials from continuing to legislate on the subject of digital assets. Because “recent events have already led them to a bipartisan effort for crypto legislation”, continues Clara Medalie. The most exemplary being the project on stable-coins (digital assets pegged to a value), which should be adopted in early 2023. A text built in rapid reaction to the collapse of the Terra ecosystem, earlier this year.

No doubt the FTX shock will fuel upcoming debates in Congress on any new legislation and certainly speed up others. “After the crash of the UST in the spring, and now FTX, yet the second largest platform in the world, the regulators have all the cards in hand to justify an even tougher framework, says Alexandre Stachchenko, blockchain director at KPMG and co-author of the book Easy Bitcoin & Cryptocurrencies (First ed., 2022). But they are taking the risk, as certain American players such as Coinbase are already warning, of accentuating the problem they seek to avoid, by pushing American consumers towards offshore companies. »

Behind the FTX affair, he nevertheless notes some encouraging elements for the sector: “Even if it’s a bad signal, there is still a positive message for bitcoin, for decentralization, he adds. Because the problems all appeared with centralized actors. We must stop personification and starification: the interest of bitcoin is precisely that it is not personified. This makes it very resilient. »

As to knowing what is the influence of the results of the midterms on the courses. FTX event brings too many ” noise “he thinks

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