Coinbase CEO Brian Armstrong claims FTX was an offshore exchange not regulated by the SEC in response to Elizabeth Warren’s tweet calling for ‘Aggressive Enforcement’ against the ‘Smoke And Mirrors’ crypto industry following the FTX debacle.
Warren cited a Wall Street Journal report on the Security Exchange Commission launching a fresh probe into FTX. “The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors,” she tweeted.
According to the U.S. SEnator, the cryptocurrency industry needs more “aggressive enforcement,” and she plans to continue pushing the SEC to “enforce the law to protect consumers and financial stability.”
According to Armstrong, the lack of clarity from the SEC is the reason for most U.S. trading activity occurring offshore. “Punishing U.S. companies for this makes no sense,” he added.
https://t.co/0HxlRiI6Sy was an offshore exchange not regulated by the SEC.
The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore.
Punishing US companies for this makes no sense.
— Brian Armstrong (@brian_armstrong) November 10, 2022
In response to Armstrong’s tweet, Ripple CEO Brad Garlinghouse cited Singapore’s regulatory framework as an example.
Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There’s a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the U.S.
Garlinghouse said.
He added that countries like Singapore “can appropriately regulate crypto b/c they’ve done the work to define what “good” looks like, and know all tokens aren’t securities”.
Circle CEO Jeremy Allaire agreed with the Crypto Execs, adding that the lack of a proper regulatory framework in the U.S. has left users exposed to the overseas supervisory structure.
Compound Finance founder Robert Leshner pointed out that FTX founder Sam Bankman-Fried had advocated for tighter DeFi regulations.
SBF spent months lobbying to kill DeFi, because he knew that transparent autonomous protocols were a threat to “trust me assets are fine” finance.
— 🤖 Leshner (@rleshner) November 9, 2022
After experiencing a liquidity crunch and agreeing to give its rival, Binance, the option to buy the company’s non-U.S. operations in what appears to be a bailout, crypto trading behemoth FTX had a huge meltdown this week.
However, Binance pulled out of the deal, and now, according to Bloomberg, US regulators are investigating whether FTX mishandled customer funds on its platform.
Meanwhile, cryptocurrency markets have reached a new bear cycle low. More than $100 billion was flushed out in less than 24 hours, causing the total market capitalization to fall by 10%.
