The Securities and Exchange Commission (SEC)’s former head of internet enforcement has warned the crypto industry that a “regulatory onslaught is just beginning.” His warning followed several recent enforcement actions the securities regulator took against major crypto firms.
‘SEC Regulatory Onslaught Is Just Beginning’
Former Securities and Exchange Commission (SEC) official John Reed Stark has warned the crypto industry of an escalating “regulatory onslaught.” Stark founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years where he led cyber-related projects, investigations, and enforcement actions.
Stark explained in a tweet Thursday that the SEC “hit Blockfi for failing to register its crypto-lending program, stopped Coinbase from launching its crypto-lending program, and Just hit Gemini/Genesis for its Earn crypto-lending grift.” He warned:
Buckle up: An SEC regulatory onslaught is just beginning.
Last week, the SEC charged crypto exchange Gemini and crypto lender Genesis “for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program.” In February last year, the regulator took action against cryptocurrency lending platform Blockfi which filed for bankruptcy in November. Moreover, the securities watchdog also threatened to sue Coinbase if the Nasdaq-listed crypto exchange proceeded to launch a lending program in September 2021. Coinbase subsequently shelved its plan.
Stark is a vocal crypto skeptic, regularly commenting on social media about the danger of investing in cryptocurrencies. “In crypto-land, the Ponzi shell game continues & a death spiral may have now begun,” he said last November. “Fail not at your peril crypto investors,” he stressed, emphasizing that crypto has “no FDIC insurance, no SEC examination teams, no regulatory oversight, no licensure, and no consumer protections.” He cautioned that with crypto investing:
You are 100% on your own.
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