The former head of Internet enforcement for the Securities and Exchange Commission (SEC) has warned the crypto industry that a “regulatory attack is just beginning.” His warning followed several recent enforcement actions the securities regulator took against major crypto firms.
‘The SEC’s regulatory onslaught is just beginning’
Former Securities and Exchange Commission (SEC) official John Reed Stark has warned the cryptocurrency industry of an escalating “regulatory attack.” Stark founded and served as head of the SEC’s Office of Internet Compliance for 11 years. He was also an SEC compliance attorney for 15 years, where he led cyber-related projects, investigations, and enforcement actions.
Stark explained in a tweet on Thursday that the SEC “hit Blockfi for failing to register their crypto lending program, stopped Coinbase from launching their crypto lending program, and Just hit Gemini/Genesis for their Earn crypto lending scam.” He warned:
Buckle up: An SEC regulatory onslaught is just beginning.
Last week, the SEC charged crypto exchange Gemini and crypto lender Genesis “for the unregistered offering and sale of securities to retail investors through the Gemini Earn crypto asset lending program.” In February of last year, the regulator took action against cryptocurrency lending platform Blockfi, which filed for bankruptcy in November. Furthermore, the securities watchdog also threatened to sue Coinbase if the Nasdaq-listed crypto exchange proceeded to launch a lending program in September 2021. Coinbase subsequently shelved its plan.
Stark is a vocal crypto skeptic, regularly commenting on social media about the danger of investing in cryptocurrencies. “On crypto-ground, the Ponzi shell game continues and a death spiral may now have begun,” he said last November. “Don’t fail at your own risk, crypto investors,” he stressed, emphasizing that crypto has “no FDIC insurance, no SEC examination teams, no regulatory oversight, no license, no consumer protection.” He warned that with investing in cryptocurrencies:
You are 100% alone.
Citing Stark, CNBC Mad Money host Jim Cramer has also been warning that the SEC is doing “a big sweep” of the cryptocurrency industry. He has urged investors to get out of crypto now.
Do you agree with John Reed Stark on cryptocurrency and that an SEC regulatory attack is just beginning? Let us know in the comments section.
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