The President of the Securities and Exchange Commission (SEC), the US federal financial market regulator, spoke about the fall of the FTX platform during a speech given on the US channel CNBC.
More regulation to come?
The Chairman of the Securities and Exchange Commission Gary Gensler was asked on the American channel CNBC about the fall of the FTX exchange.
Unsurprisingly he advocates more regulation to protect cryptocurrency investors. He also asks companies to approach the SEC to comply with the regulations and that time is running out and that sanctions will come soon. He says the SEC wants to do this in two ways:
1 – In working more with exchanges and crypto lending platforms to record and regulate them;
2 – In forcing platforms to enforce laws including more than 100 lawsuits issued by the SEC under his mandate and that of his predecessor. He notably recalls the victory of the SEC in a lawsuit against the LBRY crypto project and the sanctions against Kim Kardashian.
More transparency is requested for companies and entities wishing to carry out acquisitions or mergers in revealing the cryptocurrencies and the amounts held by these entities in order to avoid the same setbacks as with FTX’s FTT.
According to Gary Gensler, the situation is the consequence of two main things. In the first place user deposits on FTX were used to trade against them and that the latter were obviously not informed. For the Chairman of the SEC this case is related to the fall of Terra (LUNA) dating back several months.
For Gary Gensler, the cryptocurrency universe is a very interconnected world with a few central players. That one of these central players (in this case FTX) was not transparent, was used leverage, in particular via borrowing for its investments resulted in the loss of their clients’ funds.
Sam Bankman-Fried, head of the FTX exchange, had a meeting with the Chairman of the SEC last March. Gary Gensler claims to have held a firm speech to be transparent and regulated and did not confirm that he felt cheated by SBF.
Despite this event Gary Gensler repeats that technology is always interesting and that there are good innovations.
During the interview the topic of stablecoins with Tether came up, Gary said that stablecoins that provide direct or indirect returns or rewards could be considered Securities.
Gary Gensler interviewed by the American channel CNBC
👉 Follow live all the latest news from the FTX case
Did FTX take advantage of legal loopholes?
So says Congressman and Republican Tom Emmer.
Interesting. @GaryGensler runs to the media while reports to my office alleviated he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We’re looking into this. https://t.co/SznowgcP6V
— Tom Emmer (@RepTomEmmer) November 10, 2022
He indicates that the Securities and Exchange Offering, and in particular Gary Gensler, would have tried to take advantage of legal loopholes to obtain a regulatory monopoly.
Is this what Changpeng Zhao, the CEO of Binance, meant when he said on Twitter:
“We will not support people who lobby against other industry players behind their backs.»
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.
— CZ 🔶 Binance (@cz_binance) November 6, 2022
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