While speaking at a conference in Coventry, Sir Jon Cunliffe, the Deputy Governor of the Bank of England, weighed in on regulations for cryptocurrency. The official initially intended to speak about stablecoins and Central Bank Digital Currency (CBDC). Instead, he shared his thoughts on the broader crypto industry after recent events.

Sir Cunliffe described the collapse of Bahamas-based crypto exchange FTX as “the most spectacular failure to date in the crypto ecosystem.” He expressed that centralized exchanges resemble conglomerates, as they spread conflict of interest between the primary entity and its associated firms. In this case, it was FTX and Alameda Research.

Deputy governor Cunliffe revealed that the Bank of England was working with the Financial Conduct Authority and His Majesty’s Treasury to set up a regulatory sandbox. Thus, developers will explore how the risks in this industry can achieve the level of expected assurance. The Financial Services and Markets Bill, which is currently under review in UK’s Parliament, will take a look at the regulations surrounding payment systems using cryptocurrencies.