The collapse of cryptocurrency exchange FTX has been gut-wrenching for its customers, not only those who used its flagship offshore exchange in the Bahamas but also U.S. customers of Chicago-based FTX US.

But there is a silver lining to the FTX debacle. It may put an end to the way that cryptocurrency exchanges are regulated – or, more accurately, misregulated – in the U.S.

U.S.-based cryptocurrency exchanges including Coinbase, FTX US, and Binance.US are overseen on a state-by-state basis as money transmitters. Money transmitter regulation first emerged in the early 1900s with so-called "immigrant banks." Agents would collect funds from local immigrant communities in places like New York City and forward it by steamship to their families back in Europe and elsewhere.

(by JP Koning)