Does the crypto market need to be regulated?


The once third largest crypto exchange in the world had to file for bankruptcy.

(Photo: Reuters)

The low level of regulation and high volatility are what make cryptocurrencies so appealing to many investors. The collapse of the FTX crypto exchange shows that the Wild West lived on the crypto market also has its dangers.

After the spectacular rise of the stock market came an equally spectacular collapse. The end of FTX is marked, among other things, by possible embezzlement, risky financial bets, falling prices and a hacker attack. Many customers could now lose all deposits.

No wonder, then, that the Handelsblatt readership is also discussing whether the crypto market needs more regulation. One user writes: “The industry first has to clean up internally and put the chairs in front of the tables.” The legislature is almost as blind as the investors. Therefore, the industry must start creating rules. Another reader sees the responsibility with the users. “Everyone talks about the responsible citizen, which presupposes that the citizen deals with what he is doing before he does it.”

We have put together a selection for you from the letters from the Handelsblatt readers.

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The hope of unregulated cryptocurrency

“No larger organizations work without leaders, including trading and investment platforms in the crypto space. If these organizations and their management are not tied into a mandatory set of rules that is regularly examined by independent auditors, the only hope that remains is that these managers are morally upright, will not succumb to the temptation of big money and will not be succumbed to unforeseen events little by little slipping onto the wrong side – quasi ‘good rulers’.

The hope for unregulated ‘crypto money’ and the invention of blockchain technology definitely have positive aspects. The resulting opportunities are undermined by unregulated markets, which not only attract ‘good rulers’, but also lots of soldiers of fortune and crooks.

Even though I’m always upset about the perceived ‘too much’ regulation in ‘normal’ business life, I find that there is a lot of regulation, especially where a lot of money is involved and/or the money of ‘little people’ got to.”
Ralf R. Sattler

Unnecessary as a goiter

“Cryptocurrencies – as unnecessary as a goiter. Originally created to send money flows for the purchase of goods, such as raw materials, from one end of the world to the other without fees and without unpredictable exchange rate changes, the various cryptocurrencies have long since become commodities themselves.

As inflexible to each other as the dollar is to the euro, the yen to the ruble, etc., they rise and fall like all currencies and have the onerous side effect: their energy-intensive production, the so-called mining, for which computers consume terawatt hours (TWH) of electricity and again TWH of electricity for their own cooling. Energy crisis, climate catastrophe does not seem to exist in cryptomining. In 2020, 75 TWH was used for cryptocurrency mining, as much as the population of Austria (69.9 TWH) or Portugal (48.4 TWH) used in 2020…

Why doesn’t politics put a stop to the hustle and bustle?”
Robert Strnadl

>> Read about this: Supermodels, sports stars, professional investors – who are among the biggest losers after the FTX bankruptcy

Anyone who wants to gamble should be allowed to gamble

“Why is the call for regulation getting louder? Everyone talks about the responsible citizen, which presupposes that the citizen deals with what he is doing before he does it.

Anyone who invests in crypto should know that trading in cryptos is associated with high, often non-transparent risks, and that you can quickly lose your stake is just as much a part of the business as the possibility of high profits. Anyone who wants to gamble in relatively unregulated markets should gamble and not complain when things go wrong.”
Matthias Zeidler

Huge black box

“The crypto market is a huge black box. The legislature is almost as blind as the investor. How and what should he regulate? Where should he start? The crypto market leader Binance has rejected the takeover and continuation of the crypto exchange FTX with the argument of total lack of transparency, so that the FTX story is ticked off. Nevertheless, crypto remains taboo for me. Even if it would be cheap to get started at the moment.

The industry first has to clean up internally and put the chairs in front of the tables.”
Jan Troje

Bitcoin is without alternative

“Many investors will become painfully aware of the principle ‘Not your key – not your coins’. Bitcoins are stored in the blockchain. The exchange only has the private key that gives me access.

The case of FTX shows once again that you shouldn’t leave your private keys in your online wallet. I’m using the dip to buy more and I’m confident that Bitcoin will rise sharply over the next few months as stock prices go down. In the face of a global recession, the unresolved question of Taiwan, the current inflation and the federal government’s plans to cap cash payments at 10,000 euros, there is no alternative to Bitcoin.”
Dominik Rau


Modern tulip bull market

“A means of payment that contains neither value nor a guarantee from the state or from a strong company is bound to fail because there is nothing behind it but an idea. It’s only a matter of time. Why have people learned so little since the tulip boom? I guess the greed or the hope of being able to rip off someone else never dies.”
Martin Bruch

Replace greed with reason

“The FTX case must and will change the crypto market as greed should be replaced with sanity. Similar to the banking sector, we need regulation to minimize the potential damage to the economy. The FTX example shows me how pointless and highly speculative an investment in the crypto market is. I will certainly not invest in this market.”
Pure Cook

If you would like to have your say on this topic in the Handelsblatt, write us a comment, either by e-mail [email protected] or on Instagram at @handelsblatt.

More: In the past week, the Handelsblatt readership debated how useful the planned citizens’ allowance is.

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