Gary Gensler, the head of the US Securities and Exchange Commission (SEC), encouraged cryptocurrency platforms to “come into compliance” with the organisation or risk possible enforcement action.
Gensler stated in an interview with Yahoo Finance on Wednesday that “the runway is getting shorter.”
According to Gensler, the regulator has “enough jurisdiction” to crack down on the industry, and the SEC is “already suited up.”
BlockFi reached a settlement with the SEC in February for $100 million after being penalised for its loan product. The regulator also threatened legal action against the cryptocurrency exchange Coinbase for its loan programme, forcing it to abandon the initiative.
I really do suggest to these intermediaries, these storefronts, and these casinos, if you wish, to come into compliance, work with the SEC to get into compliance, and disaggregate these businesses, Gensler said. “We brought actions against crypto lending platforms including BlockFi, and we will continue to be a vigorous securities regulator,” Gensler said.
After the collapse of FTX, the once-$32 billion cryptocurrency exchange founded by Sam Bankman-Fried, Gensler made his remarks.
According to a Coindesk story from the beginning of November, the 30-year-old creator was using FTX’s native token to support his quant trading company Alameda Research. Investors reacted by selling their FTT holdings and attempting to leave the platform all at once, which left the exchange with a liquidity shortage.
According to Gensler, “The New York Stock Exchange doesn’t also operate a hedge fund and compete with its clients.”
Bankman-Fried is accused of a number of other things, including misplacing $8 billion in client funds, although he insists that he did not deliberately commit fraud and has attributed the financial disarray to accounting errors.