In a recent development, SEC Chair Gary Gensler expressed openness to the potential revival of the cryptocurrency exchange FTX under the condition that its new leadership adheres strictly to legal regulations. Gensler’s remarks came in response to reports of Tom Farley, former president of the New York Stock Exchange, considering the purchase of the bankrupt exchange originally founded by convicted fraudster Sam Bankman-Fried.
According to a recent report, Gensler emphasized the importance of operating within the bounds of the law in the cryptocurrency field, stating:
If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law,’. Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers. Or using their crypto assets for your own purposes.
Although the SEC has been increasing its scrutiny of the cryptocurrency industry, U.S. Representative Tom Emmer has criticized Gary Gensler, the securities regulator, for neglecting the flaws within platforms such as Voyager, Celsius, Terra-LUNA, and FTX. Emmer even went so far as to suggest that Gensler might have facilitated a “regulatory monopoly” for Bankman-Fried in the lead-up to FTX’s collapse, but this allegation lacked any supporting evidence.
.@GaryGensler is as ineffective as he is incompetent. Fortunately, my nonpartisan appropriations amendment to reign in SEC enforcement abuses against the digital asset industry passed the House today with no opposition.
— Tom Emmer (@GOPMajorityWhip) November 8, 2023
Congress will hold unelected bureaucrats accountable. pic.twitter.com/TGaaW8I0Eu
Tom Farley, who has been serving as the CEO of the cryptocurrency exchange Bullish since its establishment in 2021, is one of the parties interested in acquiring FTX. According to a recent report by the Wall Street Journal, other bidders include fintech startup Figure Technologies and cryptocurrency venture capital firm Proof Group. The successful bidder would be responsible for overseeing the relaunch of FTX after it emerges from bankruptcy in the coming year.
Addressing concerns surrounding fraud within the cryptocurrency industry, Gensler highlighted ongoing challenges, affirming that the sector remains vulnerable to fraudulent actors. He stressed the need for continued efforts to safeguard investors from unscrupulous practices, emphasizing compliance with international sanctions and anti-money laundering laws.
Gensler pointed out non-compliant fraudsters have been exploiting cryptocurrencies for illicit activities, underscoring the necessity of stringent regulatory measures. He questioned the suitability of allowing non-compliant actors in financial markets.
Currently, the SEC is embroiled in legal battles against major players in the cryptocurrency space, including Binance, Coinbase, and Ripple, over alleged securities violations. The regulatory body also evaluates Grayscale’s application to transition its Bitcoin Trust product into a spot Bitcoin exchange-traded fund.
