 firm Klarna says he fears the implosion of FTX will lead to an overly harsh regulatory crackdown on the financial technology sector. Sebastian Siemiatkowski warned tougher regulations would make it harder to compete with traditional lenders and leave consumers with less choice. He claimed the 'fairly scary' collapse of cryptocurrency exchange FTX would be used by the 'traditional bank industry... to again regulate this industry to the disadvantage of consumers'. 'We need more competition in the banking industry, we need good consumer protection laws but that don't stifle competition,' he told Bloomberg on Monday. 'I'm a little bit concerned that these debacles that we've seen will again inhibit that and continuously prolong the overly large profitability that we've seen in the banking industry.' Klarna and other BNPL firms are already facing stricter rules in the UK after campaigners and watchdogs warned the new form of borrowing risked pushing more people into debt. The rapidly growing sector, which is particularly popular among younger shoppers, has drawn concerns that BNPL offers could leave people saddled with large debts they cannot afford. Under changes announced by the Treasury, lenders will have to carry out affordability assessments before offering customers payment-splitting plans from next year. Firms will also be supervised by the Financial Conduct Authority for the first time and customers will gain the right to take complaints to the Financial Ombudsman Service. Mr Siemiatkowski's comments came as the cryptocurrency industry was bracing for possible 'contagion' spreading from FTX to other businesses. FTX filed for bankruptcy following a liquidity crisis that left the crypto exchange unable to meet customer demands for billions of dollars worth of withdrawals. In bankruptcy filings, the company revealed it has more than 100,000 creditors. John Ray, the liquidator who returned billions to Enron creditors after the){kind=link}
The Treasury has already launched a crackdown on the ‘buy now, pay later’ sector
The boss of “buy now, pay later” (BNPL) firm Klarna says he fears the implosion of FTX will lead to an overly harsh regulatory crackdown on the financial technology sector.
Sebastian Siemiatkowski warned tougher regulations would make it harder to compete with traditional lenders and leave consumers with less choice.
He claimed the “fairly scary” collapse of cryptocurrency exchange FTX would be used by the “traditional bank industry… to again regulate this industry to the disadvantage of consumers”.
“We need more competition in the banking industry, we need good consumer protection laws but that don’t stifle competition,” he told Bloomberg on Monday.