John Reed Stark, founder and former chief of the Office of Internet Enforcement of the U.S. Securities and Exchange Commission (SEC), has warned about a new regulatory “siege” against crypto platforms. Reed Stark believes that “crypto trading platforms are high-risk, perilous, and inherently unsafe” and recommends investors exit all crypto exchanges.
Former SEC Enforcement Chief Tells Investors to Get Out of Crypto
John Reed Stark, founder and former chief of the Office of Internet Enforcement of the U.S. Securities and Exchange Commission (SEC), has recently issued his opinions regarding the legal actions of the institution against Coinbase and Binance, two cryptocurrency exchanges.
Stark, who has more than 19 years of collaboration with the SEC, stated this might be the start of a cryptocurrency regulatory “siege” that could reach other companies in the industry. Stark explained:
Get out of crypto platforms now, I can’t say it any plainer. I believe that we now know for certain that crypto trading platforms are under a U.S. regulatory/law enforcement siege which has only just begun.
Furthermore, Stark clarified that, in his view, crypto trading platforms are “high-risk, perilous, and inherently unsafe,” declaring that the SEC is on the right track with its enforcement actions.
Lack of SEC Registration
Stark discussed how the lack of registration of these exchanges with the SEC limits the organization’s capacity for protecting crypto investors. This lack of registration has allowed crypto markets to operate without much supervision.
With crypto trading platforms, the SEC lacks any sort of oversight and access — and has scant ability to detect, investigate and deter fraudulent conduct.
Coinbase and Binance have been charged with operating unregistered trading platforms; however, Coinbase CEO Brian Armstrong issued an answer to the SEC lawsuit, denying the company could register its activities after having numerous conversations with the organization. Armstrong recently stated there was no “path to ‘come in and register’ — we tried, repeatedly — so we don’t list securities.”
In the same way, lawmakers have also criticized the SEC’s stance on this issue, accusing it of failing the cryptocurrency industry. Senator Cynthia Lummis stated that the SEC “failed to provide a path for digital asset exchanges to register,” and didn’t “provide adequate legal guidance on what differentiates a security from a commodity.”
What do you think about John Reed Stark’s recommendations, and his stance on the recent SEC actions? Tell us in the comments section below.
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