The Former head of the Internet Enforcement at the Securities and Exchange Commission (SEC) recently warned the crypto industry that the regulator could pose a serious risk to their businesses. “Regulatory attack is just the start.” His warning came after several enforcement actions taken by the securities regulator against large crypto firms.
‘SEC Regulatory Siege Just Getting Started’
John Reed Stark, the former head of the SEC’s Office of Internet Enforcement, issued a warning to the cryptocurrency community about the increasing rate of a “regulatory assault.” Stark founded and headed the SEC’s Internet Enforcement Office for 11 years and served as an SEC compliance officer for 15 years, managing cyber-related investigations and enforcement actions.
Stark said in a tweet 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: The SEC regulatory onslaught has only just started.
This week the SEC charged crypto exchanges Gemini and crypto lender Genesis with criminal activity “for the unregistered offering and sale of securities to retail investors through the Gemini Earn crypto asset lending program.” In February, the regulator took action against the cryptocurrency lending platform Blockfi, which filed for bankruptcy in November. The securities watchdog also threatened to sue Coinbase if the Nasdaq-listed crypto exchange moved forward with launching a lending program in September 2021, which Coinbase subsequently abandoned.
Stark is a prominent crypto skeptic who regularly posts on social media about potential dangers associated with investing in cryptocurrencies. “On crypto-land, the Ponzi shell game continues and a death spiral may now have begun,” he said last November. “Don’t gamble at your own risk, crypto investors,” he reminded the importance of crypto, highlighting that it has “no FDIC insurance, no SEC examination teams, no regulatory oversight, no license, no consumer protection.” His warning: Crypto investing is not for the faint of heart.
You are 100% on your own.
Citing John Reed Stark, CNBC’s Mad Money host Jim Cramer warned that the SEC was conducting “a big sweep” of the cryptocurrency industry. He urged investors to get out of crypto now.
Do you agree with John Reed Stark on cryptocurrency and that an SEC regulatory onslaught is just beginning? Please let us know your thoughts in the comments section.
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