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Regulators Signal Taking Swift Action to Protect the Cryptocurrency Industry

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According to reports, Mike Belshe, CEO and co-founder of BitGo, said that the short time between the collapse of the FTX exchange in November 2022 and the deci…

Regulators Signal Taking Swift Action to Protect the Cryptocurrency Industry

According to reports, Mike Belshe, CEO and co-founder of BitGo, said that the short time between the collapse of the FTX exchange in November 2022 and the decision of the United States Securities and Exchange Commission (SEC) to expand the types of digital assets included in the so-called custody rules in February 2023 showed that regulators were taking rapid action to take measures they considered effective to protect the encryption industry.

CEO of BitGo: regulators are taking action quickly

Analysis based on this information:


The cryptocurrency industry has been under intense regulatory scrutiny for years. However, a recent statement from BitGo’s CEO, Mike Belshe, suggests that regulators are taking swift and decisive action to protect the industry. Mr. Belshe reported that the rapid timeframe between the collapse of the FTX exchange in November 2022 and the SEC’s decision to broaden its definition of digital assets included in custody rules in February 2023 is a clear indication of regulators’ proactive approach.

The FTX exchange’s collapse sent shockwaves throughout the cryptocurrency industry, underscoring the importance of effective regulation. Regulators understand that they must respond quickly and decisively to protect consumers, preserve market integrity, and prevent systemic risks. With the market capitalization of digital assets exceeding $2 trillion, the failure of a major exchange could have significant ramifications. Therefore, the swift and robust action taken by regulators demonstrates their commitment to ensuring the industry remains safe.

The SEC’s decision to broaden the types of digital assets included in custody rules is a significant step towards improving the regulatory framework of the cryptocurrency industry. The custody rules specify the fiduciary obligations of investment firms that hold investor funds and securities. Regulating custodians of digital assets is complicated due to the unique properties of these assets. The SEC’s updated definition includes new types of digital assets, such as stablecoins, that weren’t previously covered by custody rules. As a result, funds that invest in these assets will have to abide by tighter regulatory requirements, boosting investor protection.

In conclusion, Mr. Belshe’s remarks demonstrate the growing recognition by both regulators and the industry that effective regulation is essential for the long-term health and success of the cryptocurrency ecosystem. While there has been some resistance from the community to government intervention, the industry’s continued growth and maturation requires regulatory oversight. The SEC’s actions show that regulators are adapting quickly and are willing to take bold steps to create a safer environment for everyone involved in the digital asset space.

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