FSB warns crypto regulatory arbitrage could trigger a “chain of failures”

Huoxun Finance reported on October 16th that, according to Decrypt, the Financial Stability Board (FSB) stated that its review of nearly 40 jurisdictions found "significant gaps and inconsistencies" in crypto regulation, fostering regulatory arbitrage and cross-border "forum shopping." The FSB noted that cross-border collaboration is "fragmented and insufficient," and that weak regulation of leveraged and stablecoins could trigger cascading risks under market pressure. The European Banking Authority (EBA) also stated that some crypto companies choose to enter the market in EU member states with less stringent regulations. The FSB issued eight recommendations, calling for improvements in data, asset segregation, and cross-border law enforcement to reduce systemic risks.