Former SEC Official Warns ‘Crypto Regulatory Onslaught Will Never End’
The U.S. Securities and Exchange Commission’s former head of internet enforcement has warned that “crypto regulatory onslaught will never end.” He claimed that cryptocurrency trading platforms, like Binance and Coinbase, are simply playing “a short game of regulatory arbitrage, all carried out in an effort to make as much fiat as possible before their inevitable demise.”
Former SEC Official’s Warning of Ongoing Crypto Regulatory Sweep
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark warned in a lengthy tweet on Saturday that “the SEC’s crypto-regulatory onslaught will never end (ever).” Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years.
Referring to the recent regulatory action taken by the SEC against cryptocurrency exchange Bittrex, he pointed out that the charges against Bittrex mirror those taken against other crypto exchanges, including Coinbase and . The former SEC official stressed that “by calling themselves ‘exchanges,’ ‘brokers,’ and ‘market-makers,’ crypto trading platforms like Bittrex, Beaxy, Coinbase, Binance, and others co-opt historically powerful nomenclature that implies trust, oversight and consumer protection, etc.” He cautioned: “This powerful grift can quickly evolve into dangerous and unlawful marketing theater.”
He explained that “Congress enacted the Securities and Exchange Act of 1934 to prevent and police investment schemes orchestrated by large financial conglomerates of any ilk.” Emphasized that “a Walking Dead-like post-apocalyptic marketplace quickly evolves” without SEC registration, the former SEC official asserted:
This is why the SEC’s crypto-enforcement sweep will never end.
He added that the crypto regulatory onslaught will not end because the SEC has a “threefold mission (to protect investors; to maintain fair, orderly and efficient markets; and to facilitate capital formation)” that is “far too critical for the SEC to relent.”
Stark proceeded to detail the importance of SEC exchange registration and broker-dealer registration for crypto platforms that list tokens that are securities. According to SEC Chairman Gary Gensler, all crypto tokens, except bitcoin, are securities. However, a recent court ruling found that XRP is also not a security.
He also discussed “the defiance of crypto trading firms,” stating: “For years too many crypto trading platforms have been operating as unregistered exchanges.” The former SEC internet enforcement chief claimed: “Crypto trading firms have carried out these functions despite the fact that the crypto assets it has made available have included crypto asset securities,” adding:
Financial firms like Binance, Coinbase, Beaxy, Bittrex, and other crypto-trading platforms are simply playing (and winning) a short game of regulatory arbitrage, all carried out in an effort to make as much fiat as possible before their inevitable demise (or severe reduction in size).
“The biggest irony is that these so-called ‘crypto-exchanges’ claim to be champions of the future of finance and promote themselves as digital couriers of transformative innovation that is the future of money,” Stark continued. “Don’t be fooled. Beneath their sophisticated exterior, these crypto trading platforms are masquerading a spectacularly mammoth (and effective) affinity fraud that is as old as finance itself.”
What do you think about the warning by former SEC internet enforcement chief John Reed Stark? Let us know in the comments section below.
Source: Bitcoin.com
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