Partner Nicola McKinney discusses demands for greater regulation of the cryptocurrency sector in the wake of the FTX collapse.
“News that FTX’s liquidators have pointed to signs of serious fraud at the exchange is a major and potentially concerning development in the FTX saga. If it emerges that FTX defrauded customers on a major scale, or that there were internal failings which failed to prevent external fraud this will no doubt have drastic regulatory consequences for the entire cryptocurrency industry.
The digital assets and decentralised finance industry is already facing calls for regulation from governments and from non-governmental organisations such as the IMF and UN. Should it transpire that FTX committed or failed to prevent fraud, the scope and extent of those failings is likely to take some time to emerge, including the number of potential victims, but it is likely to increase the support for new regulatory regimes to be imposed.
Cryptocurrency is an asset class that has been heavily affected by investment frauds and Ponzi schemes in recent years, however these allegations against FTX are of particular relevance given that the exchange was the third largest in the world at its peak. A clearer picture will no doubt emerge, however the liquidators’ findings pose a serious cause for concern for investors, regulators and the wider cryptocurrency market.”
Quillon Law ranked as a “Firm to Watch”
Quillon Law ranked as a "Firm to Watch" and Partner Michael Barnett recognised as a Leading Individual in The Legal 500 UK 2023 Guide
Partner Nicola McKinney interviewed by BBC News
Partner Nicola McKinney discusses banking fraud and the legal rights of those that have fallen victim to scams on BBC News.
Partner Nicola McKinney comments on the legal fallout of the FTX collapse in This is Money
Partner Nicola McKinney examines the likelihood of legal action in the UK against collapsed cryptocurrency exchange FTX.