While much of the global cryptocurrency sector is still reeling from FTX’s high-profile fall from grace, South America’s foremost crypto exchange just released its transparency roadmap.
According to a top executive from Mexican crypto unicorn Bitso, the company was driven to lay out its roadmap due to mounting pressure from users who were quite vocal with their concerns following the FTX collapse.
The exchange which currently operates in Argentina, Brazil, Colombia, and Mexico is slated to publish its solvency report within the next 30 days. Felipe Vallejo, the company’s chief regulatory officer, likewise informed the media that they are currently in the process of looking for an external auditing firm to conduct a thorough inspection of its holdings.
Properly Documented Solvency
In light of the financial issues currently plaguing cryptocurrencies and exchanges across the globe, Bitso recently teamed up with several global firms within the digital asset management community in order to create a solvency report that is easy enough to understand by both companies and their customers.
It is collectively hoped that the said report will enable users to decide for themselves if crypto companies have adequate funds with which to back transactions.
According to Vallejo, the proof of funds that some companies make public turn out to be insufficient. This is mostly because they only show assets, but not how much actual money or digital assets a firm actually owes its users.
A Need for Regulation
The way Bitso was pushed into coming up with their solvency report underscores the urgent need for regulation in the cryptocurrency sector, especially given the spectacular fall of FTX, the way Genesis is currently under hard scrutiny, and the crash of the Luna stablecoin all within this year.
According to Jean-Paul Servais, chair of global securities for the International Organization of Securities Commissions (IOSCO), regulators throughout the world, but especially in the Americas, are scrambling to bring order into the nascent industry. In Brazil, for example, lawmakers have been pressured to come up with regulations for the crypto sector; the same scenario is playing out in Argentina. Meanwhile, the US Congress hopes to have its own regulatory measures ready by next year.
Servais added that well-constructed regulations should not be seen as a way for governments to constrict industry growth. Rather, it should be seen as a necessary – and welcome – advantage that could weed out bad actors from the industry.