This negligence of FTX led to the embarrassing collapse, showing evidence of stern fraud and operating failures, which required intervention of global regulators. It was an incident that paved the way towards massively regulating cryptocurrency exchanges and paving the way towards benefiting investors and securing the integrity of the markets globally.
In the United States, it increased tremendously in enforcement. SEC went into full attack mode by going after big exchanges such as Coinbase and Kraken, insisting on registration. Banking directives were very strict in regard to custodial requirements. The DOJ has made a settlement of $4.3 billion with Binance compelling it to initiate compliance and leadership reforms, which is an example of a high level of scrutiny.
The case of Binance settlement was history making. It provided harsh punishment on infringements such as money laundering and sanctions. Importantly, it made Binance be on the constant control about compliance and exit of its creator. This will have a very strong precedent in ensuring that all platforms are brought to justice under the law.
Jurisdictions around the world ended up hastening overall structures. MiCA rules in the EU provide a definition of the standards of licensing and operations. Hong Kong came up with controlled markets, and Singapore restricted the retail admission. Global institutions advocate harmonized cross country rules as a way of preventing regulatory arbitrage.
This is one period which requires strict adherence. Exchanges have enormous pressure to establish strong KYC/AML practices, asset segregations, transparent-proof-of-reserves, and seek registration. There is no more tolerance to lax practices.
Conclusion:
The aftermath of the FTX and Binance world is a turning point. In order to tame fraud, safeguard investors and Dodd Frank Stability, regulators across the world have enacted strict regulations, vigorously enforce regulations as well as impose draconian punishment. At this point, it is unambiguous that there is the need to establish enforceable standards of compliance and bring those who contravene them to book.
