Former CEO of the Ontario Securities Commission (OSC) Maureen Jensen reiterated at the PDAC 2022 convention in Toronto that crypto exchanges are poorly regulated, citing instances in the past where client funds have been compromised. Cryptocurrency crashes highlight the risks of cryptocurrency exchanges. The OSC oversees securities in the Canadian province of Ontario.
Jensen also noted that the exchange is the custodian of your money if you do not want it to lie in your wallet. But in many cases, exchanges do not follow this procedure, and when clients want to withdraw funds, it takes a very long time. There were people who bought and sold Bitcoin but could not withdraw their coins for months. The problem is that there are no obligations on these exchanges. They are not regulated.
Jensen cited the case of Quadriga, Canada's largest crypto exchange. In 2019, Quadriga filed for bankruptcy following allegations that the CEO traded his clients' Bitcoins and used a Ponzi scheme. This is a scam that lures investors and pays profits to earlier investors at the expense of later investors. At the same time, clients think that the profit comes from legitimate business activities.
Warning that this could happen again, Jensen stressed the need for increased regulation.
Macroeconomic outlook:
The world, which is divided into the West, dominated by the United States, and the East, ruled by Russia and China, in turn, means greater volatility on a global scale, as Jensen believes.
In the West, inflation has increased, supply chain problems have added, and oil prices are skyrocketing because Russia has cut oil and gas supplies by 40 percent in the past two months.
Jensen highlighted the geopolitical tensions in Eastern Europe. She also added that there is a risk that China and Russia will use their strategic metal reserves to monopolize the markets for rare earth minerals. Jensen emphasized the need to address the issue of expanding supply chains, noting that now the need has come to build their infrastructure.