Richmond Fed, Report: What Is a Crypto Conglomerate Like FTX? Economics and Regulations
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“In this article, we revisit the economics behind crypto conglomerates and highlight the associated risks. One prevailing principle of financial regulation is “same activity, same regulation.” However, such a principle tends to identify regulation by activities on their own and, hence, might ignore the amplification of risks that occurs when activities are bundled in a crypto conglomerate.”
“In addition, the interconnected between crypto conglomerates and the traditional financial sector — as seen in the fall of Silvergate Capital — may spread these amplified risks of crypto conglomerates on the macro level. Distinguishing these risks would be crucial in thinking about crypto regulations in the future.”