Search
Search
SEC Chief: FTX Restart is Possible Within Law

SEC Chief Gensler: FTX Restart by Former NYSE Boss Possible Within Law

0
0

548 Listen to this article Washington, D.C. – In an interview at DC Fintech Week, SEC Chair Gary Gensler weighed […]

Latest News

Listen to this article

Washington, D.C. – In an interview at DC Fintech Week, SEC Chair Gary Gensler weighed in on the potential revival of the crypto exchange FTX under new leadership. Gensler stressed the importance of adhering to legal regulations and building trust with investors in any revival attempt.

The discussion comes in the wake of FTX founder Sam Bankman-Fried’s recent conviction on fraud charges, which led to the company’s bankruptcy proceedings over the past year.

Gensler highlighted the reports of Tom Farley, a former President of the New York Stock Exchange, being among the potential bidders to acquire the remaining assets of the bankrupt FTX. Farley had launched his digital asset exchange called Bullish earlier this year and is considered a finalist in the bankruptcy auction.

Read Also: US Lawmaker Proposes to Cut SEC Chair Gary Gensler’s Salary

Guidance from Gensler

Gensler advised that anyone, including Farley, looking to enter the cryptocurrency field should do so within the bounds of the law. He stressed the importance of gaining the trust of investors, ensuring proper disclosures, and avoiding practices like trading against customers or using their crypto assets for personal gain.

Read Also:  Ledger Unveils New White Paper 100% Secure Recovery Service For Crypto Investors

Criminal Charges and Fund Misappropriation

The FTX case came to the forefront after Sam Bankman-Fried was found guilty of all seven criminal charges against him, which included fraud and money laundering. The charges included allegations that the exchange funneled customer funds to the sister hedge fund, Alameda Research.

Alameda Research’s Privileges

Alameda Research, which served as a market maker for FTX, received special privileges, including a $65 billion line of credit with no collateral requirement. Unlike other customers on the platform, Alameda had the unique ability to engage in trading bets without having their positions liquidated.

Read Also: US Lawmaker Proposes to Cut SEC Chair Gary Gensler’s Salary

Traditional Market Standards

Gensler pointed out that such practices wouldn’t be tolerated in traditional financial markets, stating,

“We would never let the New York Stock Exchange also operate a hedge fund and trade against their members or trade against customers in the market.

FTX and Alameda were supposed to maintain a firewall between them, but the trial revealed their close relationship. Separate from the criminal charges, the SEC and the Commodity Futures Trading Commission (CFTC) brought civil suits against FTX. In December, the SEC accused Bankman-Fried of conducting a “brazen” and long-standing fraud.

Enforcement of Existing Laws

Gensler emphasized the importance of enforcing existing securities laws rather than creating new regulations, stating that current securities laws are robust and strong and should be applied to the crypto industry.

Read Also: US Congressman Warren Davidson Urges SEC Chair Gensler’s Removal After Grayscale’s Legal Victory

Read Also:  Sam Bankman-Fried: Trial of 'Crypto King' Begins

Global Crypto Industry Compliance Concerns

Regarding FTX, which was primarily used by customers outside the U.S. and had a small American affiliate, Gensler compared it to the situation with crypto exchange Binance, which has faced scrutiny from U.S. regulators for serving high-net-worth U.S. investors on its unregulated international platform.

Gensler expressed concerns about crypto actors not complying with international sanctions and money laundering laws, without specifying particular companies or individuals.

SEC’s Commitment to Crypto Regulation

The SEC has recently faced legal challenges, including losses to Ripple and Grayscale, but Gensler underlined the SEC’s commitment to regulating the crypto space. He mentioned ongoing legal disputes, such as the one with Coinbase, a U.S.-based crypto exchange, which has considered relocating due to regulatory constraints.

Gensler concluded by emphasizing that companies operating in the U.S. crypto market must adhere to the law, even if it means taking action against non-compliant actors.

For the Latest Crypto News follow the Coinography and Subscribe our YouTube channel or follow us on social media platforms like Twitter, Facebook, Instagram and LinkedIn.

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Get Latest Updates

Latest News

Web Stories

Latest News

0
Would love your thoughts, please comment.x
()
x
Scroll to Top
Bitcoin ETFs Surge as Investors Seek Exposure Coinbase, Andreessen Horowitz, and Ripple have joined forces to fund a new crypto DMM Bitcoin Hit by $305M Hack Ripple Releases 1 Billion XRP Tokens What to Expect from Bitcoin’s Price Rally in H2 2024 Trump’s MAGA Coin Soars 7% While Biden Parody Sinks Amid Ex-President’s Trial — NFTs Hold Steady Analyst Warns About Dogecoin Decline CME Denies Solana Futures Plans Amid Growing Rumors Can PEPE flip Polygon? Market cap race heats up! Why Bitcoin Price Is Down Today? Cristiano Ronaldo Launches 4th NFT Collection on Binance Amid $1B Lawsuit Coinbase Alleges SEC Dodging Howey Test in New Appeal Ethereum ETFs Granted Official Approval by SEC Crypto Whale Splurges $10.4 Million on Meme Coin PEPE SOL Price Nearing Support as On-Chain Activity Dips for Solana Penguiana Meme Coin’s Presale Achieves Success, Raising 290 SOL Solana to Bitcoin Bridge, Zeus Network, Set for Debut in Q3 2024 DeFi Lending Leader Aave Unveils V4 Protocol Overhaul MicroStrategy (MSTR) Incurs Losses in Q1 After Digital Asset Impairment Takes Toll Upbit Emerges as Top Five Crypto Exchange, Posing Challenge to Binance, Coinbase