During a speech yesterday, Michael Hsu, the Acting Comptroller of the Currency, compared the collapse of the cryptocurrency exchange FTX to the bankruptcy of BCCI Bank in 1991. The demise of BCCI led to changes in banking regulations, including the need for the regulator to branch of a bank has visibility over its entire operations.

BCCI was known for its global reach, with operations in 72 countries.

Comparing FTX and BCCI, Hsu observed: “Both lacked a primary or ‘home’ regulator with the authority and responsibility to develop a consolidated and holistic view of the companies. Both operated in jurisdictions where there was no established framework for regulators to share information about company operations and risk controls. Both used multiple auditors to make sure no one could get a holistic view of their companies.”

In response to the bankruptcy of the BCCI, the US introduced the Foreign Bank

Supervision Enhancement Act, which requires any foreign bank with operations in the United States to have a home country regulator with consolidated supervision.

Hsu highlighted the work of various international standards bodies regarding cryptocurrency, including the Financial Stability Board, the International Monetary Fund (IMF), and CPMI/IOSCO. And he hopes they will put crypto companies under consolidated oversight, not just compliance.

He noted that no crypto platform is currently subject to consolidated supervision. His statement, “None”, must include Coinbase.

The Controller acknowledged that the analogy between BCCI and FTX is not perfect. The BCCI liquidation dragged on for 22 years, including the UK’s most expensive lawsuit when the liquidators spent 12 years suing the Bank of England.

Since FTX’s advisory bill for January was $38 million, FTX’s creditors have to wait for a quicker conclusion.