Bank of England Deputy Governor Sir Jon Cunliffe has commented on the recent collapse of cryptocurrency exchange FTX, stating that investing in cryptocurrencies such as Bitcoin is effectively gambling and that regulation is needed in the sector.
He also expressed skepticism about the potential for decentralised finance (DeFi) to effectively manage financial risks, stating that the resilience and robustness of permissionless blockchain technology has not yet been demonstrated at scale.
In addition, Cunliffe added that it is not clear how decentralized platforms would be able to manage risks such as conflicts of interest, transparency, audit and accounting, and that it is important for financial regulators to ensure that consumers are adequately protected.
