Crypto rules needed after FTX collapse, says Bank of England

Better regulations are needed to protect the financial system after the collapse of the FTX cryptocurrency exchange, a senior Bank of England official has said.

Digital currencies are still too small to pose a threat but that will soon change, said Sir Jon Cunliffe.

Thousands of its users are also waiting to get their money back.

Sir Jon, who is deputy governor for financial stability at the Bank, also said the recent volatility in the value of cryptocurrencies posed a threat.

The value of Bitcoin, the world's largest digital currency, has dived by almost 70% in the last year.

He said the crypto world was, at present, not "large enough or interconnected enough with mainstream finance to threaten the stability of the financial system".

But he said its links with mainstream finance were developing rapidly.

"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 destabilising impact."

FTX did not have a licence to operate in the UK, but its implosion has caused shockwaves around the world.