FTX collapsed because it mixed several activities in one place, according to a key figure at the Financial Conduct Authority.

Despite not being registered in Britain, 80,000 people lost investments when the cryptocurrency exchange – through which people can buy, hold and sell tokens – went bankrupt.

Matthew Long, director of the FCA’s digital assets unit, told parliament’s Treasury Select Committee that alongside trading FTX also issued tokens, featured wholesale market activity and carried out safeguarding of funds.

“In our view, [that is] extremely dangerous because you can have interaction between each of those things,” he said. “In other regulated areas, they would be separate legal entities or have ‘sterile’ corridors – so they couldn’t effectively influence each other.

“We need a regulation that deals with those sterile corridors [to avoid this happening again].”

IOSCO, an umbrella group for securities watchdogs, is expected to recommend how best to regulate in this way by mid-2023.

Despite this, Long added that regulators’ response to the collapse of FTX would be “pacy”, with the UK’s financial services and markets bill to begin a public consultation imminently.

In the US, Securities and Exchange Commission chair Gary Gensler said cryptocurrency firms should have to comply with existing rules.

“[They are like] casinos wherein the investing public is looking for a better future,” he said. “And because most of these tokens are securities, the casinos need to come into compliance with our time-tested laws.

“Their business model right now is offering the public, they say, an interest return in crypto… and then possibly trading against their customers, trading ahead of their customers, lending that out. Anywhere else in finance, these conflicts are not allowed and they’re separated out.”

Cryptocurrency shorts

The US Senate Banking Committee plans to subpoena former FTX CEO Sam Bankman-Fried to appear before it next week to discuss what happened if he does not appear voluntarily.

A US federal judge has ordered crypto lender Celsius to return $44 million of crypto to the collapsed platform’s custody programme customers.

Perennial, a decentralised finance platform for trading derivatives, has launched with a $12 million seed funding round led by Polychain Capital and Variant.

JPMorgan CEO Jamie Dimon says crypto tokens are like “pet rocks”. He added to CNBC: “So Bitcoin is worth under a trillion dollars today – and we’re not sure that’s a real market, by the way.”

Crypto prices

The overall market cap of the 21,900 coins is at $840 billion at the time of writing (7am UK), a 1.2% decrease in the last 24 hours.

For round-ups of recent cryptocurrency news developments, click here.

For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.