Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, says the collapse of cryptocurrency exchange FTX has highlighted the urgent need for tighter crypto regulation. “We should not wait until it is large and connected to develop the regulatory frameworks necessary to prevent a crypto shock that could have a much greater destabilizing impact,” said the deputy governor.

The Bank of England deputy governor added that FTX’s failure highlighted the need for regulators to establish tighter controls as quickly as possible. Referring to the crypto industry, Cunliffe stressed:We should not wait until it is large and connected to develop the regulatory frameworks necessary to prevent a crypto shock that could have a much greater destabilizing impact.

Crypto firms operating in the U.K. are currently regulated by the Financial Conduct Authority (FCA). In addition, the British government is finalizing new financial services and market laws that will introduce regulation for stablecoins and the marketing of crypto assets.

Moreover, Cunliffe added that Britain’s finance ministry will soon start consultation on extending investor protection, market integrity, and other regulatory frameworks that cover the promotion and trading of financial products to activities and entities involving crypto assets. In July, the Bank of England said crypto needs enhanced regulatory and law enforcement frameworks.