SEC On The Verge Of Banning Cryptocurrencies After The Spectacular Collapse Of FTX!

The dramatic collapse of the FTX cryptocurrency exchange last month sent shock waves throughout the cryptocurrency industry. Millions of FTX users have lost their hard earned money trading FTX.

The situation with FTX has prompted the SEC to gather enough legal ammunition that could lead to consideration of bans on digital assets and other centralized crypto exchanges.

Earlier this week, on Wednesday, the US Securities and Exchange Commission (SEC) announced charges against two major allies of FTX founder Sam Bankman-Fried. They are FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison. The duo pleaded guilty to federal authorities.

SEC: The FTX token (FTT) is a security

In a separate development, the SEC said the native token FTT of the FTX exchange sold as an investment contract was a “security”. In its complaint to the court, the SEC said:

“If the demand for trading on the FTX platform increases, the demand for the FTT token may increase, so any increase in the price of FTT will benefit FTT holders equally and directly proportional to their FTT holdings. The large allocation of tokens to FTX got FTX -management to take steps to attract more users to the exchange and thereby increase the demand and exchange price of token FTT.”

As a result, the SEC also charged Caroline Ellison and Gary Wang with securities fraud for offering FTTs as unregistered securities and for manipulating the price of FTTs. The SEC also called the FTT token “illiquid crypto asset“.

In addition, the securities regulator also called the program “buy and burnfrom the SEC, adding that this move, along with several other exchange tokens, is similar to a stock buyback where FTX’s earnings would buy back and fuel FTT, thereby increasing its value.

The SEC should ban cryptocurrencies

Earlier this week, US Senate Banking Committee Chairman Sherrod Brown said the SEC and CFTC should consider banning cryptocurrencies. The US Banking Commission has jurisdiction over all financial institutions in the United States. During an appearance on the show “Meet the press” from NBC on December 18, Sherrod Brown said:

“We want them [la SEC et la CFTC] do what they need to do at the same time, maybe ban it, although it is very difficult to ban it because it would go abroad and who knows how it would work”.

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