SEC Chair Gensler: Crypto Crackdown Is Just Getting Started.
Following the massive downfall of multiple crypto empires like Terra Luna and crypto exchange FTX, regulators are now planning to double down on their crypto regulations more than ever.
In a recent interview on Thursday, US Securities and Exchange Commission chair Gary Gensler stated that the SEC was “just getting started with its crackdown on crypto firms.”
Gensler explains that the agency’s patience is starting to wear thin against crypto exchanges and firms violating their regulations. “The runway is getting shorter to start following rules and register with the agency.” Gensler said.
Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance. https://t.co/m8oh0gTvc3
— Gary Gensler (@GaryGensler) December 22, 2022
During the interview, Gensler refused to make any comments on which crypto firms exactly were going to be investigated or looked into by the SEC or what direction the investigation on FTX was going to go.
Previously, the SEC chair heavily criticized many of the executives involved with the collapse of FTX, including former FTX CEO Sam Bankman-Fried, FTX co-founder Gary Wang, and Alameda Research former CEO Caroline Ellison.
Gensler argues that the three had touted the exchange as a “safe platform” all the while actively defrauding its investors.
Along with that, Gensler also criticizes the current proof-of-reserve reports efforts that many exchanges are creating following the collapse of FTX, an attempt that firms are making to prove that they have enough funds on hand in order to back customer deposits.
Gensler argues that these reports do not fully accommodate the list of assets and liabilities of a company. “Proof of reserves is neither a full accounting of the assets and liability of a company, nor does it satisfy segregation of customer funds under the securities laws.” Gensler said.