15 Dec 2022
FTX collapse prompts layoffs, regulations, and G20 attention.
The Group of 20 (G20) nations, including 19 countries and the European Union (EU), have been debating bringing "a policy consensus" on digital currencies after the collapse of the popular cryptocurrency exchange FTX sparked fears of another bear market.
Better crypto regulations are on the G20's radar.
In Bengaluru, India, the G20 deputies are holding their first “central bank deputies” meeting.
Ajay Seth, India's federal economic affairs secretary, was quoted in a Reuters article on Thursday, recommending that a policy consensus be developed regarding cryptocurrencies.
“The regulation should flow from the policy view taken. In fact, one of the priorities which have been put on the table is to help countries build a consensus for a policy approach to the crypto assets,” Seth said.
The crypto exchange FTX, based in the Bahamas, has recently collapsed and filed for Chapter 11 bankruptcy alongside its sister company, Alameda Research, prompting the G20 meeting. The trading platform suffered a rush of withdrawals, and a rescue deal failed, contributing to the company's insolvency.
Even more, China, a G20 member, thinks authorities should exert more control over digital currencies. The report comes from the China Securities Regulatory Commission (CSRC), which notes FTX's effect on the entire crypto ecosystem and adds that regulators should work to safeguard retail investors.
A further round of layoffs is coming to the crypto industry.
Amber Group, an Asian crypto trading and lending platform, has reportedly begun laying off employees and canceling bonuses as the saga of FTX continues, as reported by Bloomberg. An internal document seen by Bloomberg states the Singaporean firm has begun “cost-cutting measures,” which include eliminating employee rewards for 2022 and lowering employee compensation.
CEO Michael Wu recently told Bloomberg that the company has been preparing for a “prolonged crypto winter” since “even before the collapse of FTX.”
It's too bad there won't be any bonuses this year, he said. The report claims that Amber Group could lay off as many as 800 of its 1,100 employees. Bloomberg also reported that the company “has paused a $100 million funding round” and will terminate its contract with the English football club Chelsea FC.
The report claims that Amber only risked about 10% of her “trading capital” on the defunct cryptocurrency exchange.
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