Former SEC Chief Warns, “Get Out Of Crypto Platforms Now” -What’s Going On?
Former Enforcement Division chief of the U.S. Securities and Exchange Commission (SEC), John Reed Stark, came up with a warning in his Tweet on June 8, 2023. The warning came directly with the label "Get out of crypto platforms now."
Following the SEC's actions against Coinbase and Binance, Stark issued this caution to cryptocurrency investors. The SEC filed a complaint against Binance Holdings Ltd. and its CEO Changpeng Zhao on June 5.
The day after the class action was filed, the watchdog filed a second lawsuit alleging that cryptocurrency exchange Coinbase had broken SEC securities laws.
He claimed that there is "not just a gap in customer protections, but a chasm," noting that there are no order flow, price, or record-keeping regulations on cryptocurrency exchanges.
He added that the law did not require them to follow U.S. rules and regulations. All these rules that forbid unethical practices include insider trading, market manipulation, and trading against clients.
Stark said that the reason for his conviction was that the company was not registered with the SEC. A serious lack of operational oversight and customer safety is directly responsible for this.
Additionally, Stark contended that cryptocurrency exchanges are not required to follow laws governing cybersecurity or privacy protection. They neglect to handle concerns since they are immune from internal compliance duties.
He also brought up the lack of operational and financial minimum criteria, painting a bleak picture of the situation in the industry.
Stark's caution is in line with the growing concern among investors about the regulatory ambiguities surrounding crypto platforms.
Many people are looking for alternative decentralized solutions due to a mix of legal
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