Why regulatory clarity may be a silver lining to the FTX crisis

Episode 120 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro, and Drew Forman, Managing Partner and Head of Cowen Digital.

Listen below, and subscribe to The Scoop on AppleSpotifyGoogle PodcastsStitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to [email protected].

In 2020, Cowen Digital formed to allow institutional customers of the investment bank Cowen to trade digital assets. The digital arm has been growing steadily in its eight months of existence, despite the onset of crypto winter.

In this episode of The Scoop, Cowen Digital managing director and head Drew Forman explains how the crypto industry can rebuild in the wake of FTX’s meltdown, as well as what it will take to repair trust in the space among institutional investors.

According to Forman, many of Cowen’s institutional clients are “getting the pipes ready” to take part in crypto’s next wave. But regulatory clarity is still needed before large, sophisticated institutions get involved. Forman explains:

“I welcome a set of rules ahead of time that we all look to abide by — and hopefully that allows the big institutional investors with the trillion dollar balance sheets to start allocating to the space.”


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The SEC and DOJ are currently examining FTX’s case, and the CFTC chair’s is set to appear before the Senate Agriculture Committee on December 1 to testify on the exchange’s collapse.

During this episode Chaparro and Forman also discuss:

  • Why talent consolidation is good for the space
  • How Cowen Digital manages risk and volatility
  • Cowen’s history with Mt. Gox

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

This episode is brought to you by our sponsors Tron, Ledn

About Tron
Founded in 2013, Huobi Global is one of the largest virtual asset exchanges in the world. Huobi Global serves millions of users across international markets. Since its establishment, Huobi Global has committed to providing first class virtual asset investment services. Huobi Global's robust infrastructure, product innovation and capital strength provides a truly customer-centric and secure trading environment to help our international users to achieve their investment objectives. Please refer to Huobi's official website for more information: huobi.com.

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Authors

Davis Quinton is the Director of Podcasts at The Block and runs our flagship podcast called The Scoop, hosted by Frank Chaparro. Since joining The Block as an 'intern' in early 2022, he has worked closely with leaders across departments to translate The Block's written content into engaging multimedia formats. He holds a degree in Social Research & Public Policy from New York University in Abu Dhabi and is based in Sydney, Australia.
Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].