FTX policy exec says its ‘priorities have not changed’ amid market madness

As the crypto markets continue to trend downward, the world’s second-largest crypto exchange, FTX, remains undeterred.

“Our priorities have not changed,” Mark Wetjen, head of policy and regulatory strategy at FTX, told TechCrunch. “Markets will do what they do, but the reality is that the digital asset marketplace and digital asset ecosystem, we believe, is here to stay.”

If anything, the exchange, last valued at $32 billion, has the potential to become something of a savior for a number of struggling crypto companies. At the least, it’s been in the news often enough to give that theory some credence.

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For one, FTX has reportedly gathered over $2 billion for acquisitions and stakes in other companies. The company has also launched a $2 billion venture capital fund earlier this year to back teams building in web3.

“One of the challenges of operating in the space is the relative lack of clarity.” Mark Wetjen, head of policy, FTX

At the end of June, FTX was rumored to be in talks to buy crypto lender BlockFi for $25 million, a price tag that’s a 99% drop from BlockFi’s last valuation of $4.8 billion, CNBC reported. BlockFi CEO Zac Prince quickly denied the claims on Twitter. But that deal mostly came to fruition on Friday for a purchase price of up to $240 million, though the final numbers will not be clear for some time.

The exchange also was rumored to be acquiring Robinhood Markets, but FTX CEO Sam Bankman-Fried said in a statement to TechCrunch that it was not in active M&A talks with Robinhood but the firm was open to partnering with the app-based trading platform.

The need for regulation

But as crypto markets remain volatile, there is now more demand for regulation, Wetjen said.

So far this year, total crypto market capitalization has fallen from over $2 trillion to under $1 trillion, while the top five cryptocurrencies by market cap have fallen over 50%, CoinMarketCap data shows.

“The market conditions have created a higher level of urgency, based on what I’ve seen and heard, to move on some policy endeavors,” Wetjen said. “Especially in Congress, especially from members who have taken an interest in the stablecoin area.”

Stablecoins began attracting widespread attention in early May, when the so-called algorithmic stablecoin TerraUSD (UST) fell over 99% below its $1 peg, which was always supposed to hold at a 1:1 ratio with the U.S. dollar, bringing down the whole crypto market with it. Its sister cryptocurrency, LUNA, also plummeted after hitting all-time highs of around $119 in April, just a few weeks before it crashed over 99% as well.

Around the same time, U.S. Treasury Secretary Janet Yellen pushed for the regulation of stablecoins during her annual testimony in front of the Senate Banking Committee. “We really need a consistent federal framework,” she said.

Wetjen said he has seen public statements and has had private conversations with people in Congress who say stablecoins are an area that “deserves attention sooner rather than later.”

But will such regulation be a step forward for the crypto industry?

Wetjen thinks so:

[Regulation] creates very clear rules of the road for the industry, and that’s something the industry has been clamoring for. It hasn’t always been the sentiment, and of course, it can be taken too far, but whenever there’s … something to be said when at least it does provide some clarity.

As many crypto companies and projects try to build in the space with few global legal frameworks to hold to, regulation could be a breath of fresh air to help them navigate legal waters.

“One of the challenges of operating in the space is the relative lack of clarity. Most actors, including FTX, who want to remain in the space for the long haul would like to see clarity as soon as it could come,” Wetjen said.

“For [crypto] to continue to grow and for it to be continually more relevant to everyday people, the industry and ecosystem is going to continue to tighten its embrace with the regulated areas of finance and different types of regulators.”