The former head of internet enforcement for the US Securities and Exchange Commission (SEC) warned the cryptocurrency industry that a “regulatory attack has just begun”. His warning follows the last few enforcement actions the securities regulator has taken against major crypto firms. Here are the details…
Former SEC official: Regulatory attack on crypto industry coming
Former Securities and Exchange Commission (SEC) official John Reed Stark has warned the crypto industry of an increasing “regulatory attack.” Stark founded the SEC Office of Internet Enforcement and served as its president for 11 years. He was also an SEC administrative lawyer, where he led cyber-related projects, investigations and enforcement actions for 15 years. Stark announced in a tweet Thursday that he has stopped Coinbase from launching its crypto lending program, while stating that the SEC is “targeting Blockfi for failing to register its crypto lending program.” He also mentioned that he scrutinized Gemini/Genesis because of the Earn platform. Stark used the following statements:
Buckle up: An SEC regulation attack is just getting started.
Last week, the SEC accused crypto exchange Gemini and crypto lender Genesis for “the unregistered supply and sale of securities to retail investors through the Gemini Earn crypto-asset lending program.” In February last year, the regulatory agency took action against cryptocurrency lending platform Blockfi, which filed for bankruptcy in November. Also, the securities watchdog threatened to sue Coinbase if the Nasdaq-listed crypto exchange continues to launch a lending program in September 2021. Coinbase later shelved its plan.
Experts warn of SEC
Stark is a crypto skeptic who regularly comments on the dangers of investing in cryptocurrencies on social media. “The Ponzi game continues in the land of crypto and now a death spiral may have begun,” he said last November. “Crypto investors, don’t take risks,” he stressed, emphasizing that crypto is “not covered by FDIC insurance, SEC review teams, regulatory oversight, licensing, and consumer protection.” He warned about crypto investing:
You are 100 percent on your own.
On the other hand, CNBC Mad Money host Jim Cramer, quoting Stark, also warns that the SEC is having a “big sweep” in the crypto industry. Cramer even urged investors to exit crypto now. However, after this call, Bitcoin reached the highest levels it has seen since November. For this reason, Cramer’s predictions, who do not have a very good reputation in the crypto money field, are starting to be taken seriously.
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