Crypto Industry’s Onslaught Forthcoming
Very recently, the Securities & Exchange Commission of the US (SEC) has been seen taking enforcement actions against a number of major crypto firms.
It seems as if SEC has now taken a vow to enforce its regulatory powers to tighten unruly crypto entities in the industry.
In this connection, an ex-key official of SEC was seen issuing warnings, suggesting and claiming the ‘onslaught’ of the crypto industry.
The whistleblower is John Reed Stark who was once at the helm of affairs of the SEC. He was in charge of SEC’s special wing called ‘Internet Enforcement’, which was founded originally by Stark himself.
He remained associated with SEC for over two decades. For 15 years, he represented SEC in enforcement actions and investigations involving cybercrimes as its official attorney.
Thereafter, he spent 11 years at SEC’s Internet Enforcement where he helped SEC in upholding regulatory compliance by internet-based entities.
On 12th January, Stark was seen using Twitter and sending posts containing regulatory warnings to various crypto entities.
He wanted to ensure that the cryptocurrency entities were always on the alert and knew that someone was watching them.
The very feeling of being watched by the regulators would cause enough fear among the crypto firms and they would not think about running any scams.
Stark Calls for Enforcement Actions against Several Crypto Corporates
Stark’s first tweet post contained a reminder of action taken by the SEC against an enormously popular crypto platform called ‘Blockfi’.
In his second tweet, he reminded SEC’s action against Coinbase in which Coinbase was stopped by SEC from proceeding with the lending scheme. Third, he reminded SEC’s go after the ‘earn crypto lending’ scheme belonging to Gemini/Genesis.
After posting these ‘reminder’ tweet messages, he claimed that the industry’s onslaught at the hands of SEC is ‘right in the corner’.
Recent Regulatory Actions Taken by SEC against Major Crypto Firms
It is quite true that over the few days, SEC has been actively taking regulatory enforcement actions against several major crypto firms. Amongst these major firms are Coinbase, Gemini, Blockfi, and others.
The most recent action initiated by SEC was against two crypto corporates namely Genesis and Gemini.
Both firms were accused of attracting investors toward “non-approved offers” involving the sale of ‘unregistered/unauthorized securities”. Consequently, both were stopped and issued show cause notice to explain their cases.
Similarly, the action was initiated against Blockfi in February 2022 when the SEC accused the firm of launching an unauthorized crypto lending scheme.
However, later, Blockfi couldn’t hold on to the crypto market crisis and in November 2022, sought bankruptcy protection.
SEC’s Warning to Coinbase
In addition, a warning of filing a lawsuit before a competent forum was issued by the SEC to a leading decentralized crypto platform called “Coinbase”.
SEC noted that Coinbase was planning to launch a crypto lending scheme which it had proposed to initiate in September 2021. However, SEC objected to this scheme when Coinbase reaffirmed its launching of the same very recently.
After SEC’s warning, Coinbase has however refrained from pursuing its plan to launch the objectionable scheme.
Stark is known to be crypto-concerned and has been sending warnings to investors for a very long time.
He believes that investing in crypto is highly risky and advocates his belief actively on social media networks, particularly Twitter.
Stark regarded the crypto industry as a ‘land of Ponzi schemes’ three months ago. At that time, he even warned crypto investors to be cautious as, according to him, there is no surety/protection of their investments.
In the past, he also warned by suggesting that crypto investors are on their own and accountable for their own deeds.
Now he is warning about the ‘onslaught’ of the entire crypto space at the hands of the SEC. The crypto industry must not take it lightly because the words are coming from someone who himself had been in the crypto sector for a while.
The US SEC already has a strong history of going after crypto firms from time to time. This time, if the warning is for the entire industry, then the entire industry must buckle up.