Mark Branson, chairman of Germany’s financial market regulator BaFin, said an approach that “would simply let the industry grow as a playground for adults” was the wrong tactic.
“We saw the self-regulating world. It won’t work,” Branson told reporters in Frankfurt on Tuesday night.
Branson spoke hours after US prosecutors charged Sam Bankman-Fried, founder of cryptocurrency exchange FTX, with embezzling billions of dollars and breaking the law in one of America’s biggest financial scams.
“Now is the time for serious regulation of cryptocurrencies,” he said. “The most important point is that we don’t just need a European solution. We need a global solution.”
Regulation of the industry has been described as lax and confusing. Germany requires licenses for banks to deal with cryptocurrencies.
The European Union is working on a new Markets in Crypto Assets Regulation (MiCA) that some, including European Central Bank President Christine Lagarde, say should be expanded in a future reissue and called “MiCA 2” .
Branson has sounded sceptical about the sector in the past. Last month he said in an interview on the ECB’s website that “not all cryptocurrency business models are serious”.
“Innovation waves, as we know, bring with them fraudsters,” he said.