Sam: I think the problem is that we don't have clarity about the crypto specific regulations like what's a commodity, what's a security and that lack of regulatory clarity has pushed a lot of this business offshore to these less regulated exchanges.
The lack of regulatory clarity in the cryptocurrency space is pushing business offshore to less regulated exchanges. Companies like Coinbase, which are already regulated like traditional financial services, need clarity regarding crypto-specific regulations to move forward in the industry.
Alameda, a hedge fund owned by Sam Bankman-Fried, who also owns cryptocurrency exchange FTX, is being accused of using customer funds after suffering losses during a shakeup in the crypto industry. Bankman-Fried allegedly took funds from FTX users to cover the losses of Alameda, which operates inside FTX as well as elsewhere.
This podcast discusses how cryptocurrency exchanges may have liquidity mismatches where the total asset value held in a portfolio of coins does not necessarily match individual users' accounts.