The former head of the Securities Exchange Commission (SEC) enforcement division has issued a warning to the cryptocurrency industry that the regulator could be a threat to their business. “The regulatory onslaught is just beginning.” Following a number of enforcement actions the SEC recently took against major crypto companies, a warning was issued.
Crypto Industry Warned: SEC Regulatory Onslaught is Just Beginning
John Reed Stark, who served as the head of SEC’s Office of Internet Enforcement for 11 years and was an SEC compliance officer for 15 years, managing cyber-related investigations and enforcement actions, clarified 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 assault is only beginning.
Last week, the SEC charged Gemini Crypto lender Genesis for “the unregistered offering and sale of securities to retail investors through the Gemini Earn crypto asset lending program.” In November, the regulator took legal action against cryptocurrency lending platforms Blockfi, and in February of last year, the Securities Watchdog threatened to sue Coinbase if the Nasdaq-listed crypto exchange proceeded with the launch of a lending program in September 2021. Coinbase eventually abandoned the plan.
Stark is a prominent crypto skeptic who regularly posts on social media about potential dangers associated with investing in cryptocurrencies. “In crypto-land, the Ponzi shell game continues and a death spiral may now have begun,” he said last November. “Crypto investors, don’t fail at your own risk,” he stressed, warning of crypto’s lack of FDIC insurance, SEC examination teams, regulatory oversight, license, and consumer protection. He cautioned:
You are on your own.
CNBC’s Mad Money Host Jim Cramer echoed Stark’s advisory that the SEC is doing “a big sweep” on cryptocurrency industry, and has encouraged investors to get out of crypto.
Do you agree with John Reed Stark that the SEC regulatory attack on cryptocurrency is only beginning? Please let us know in the comments section below.
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