Cryptocurrency exchanges face a long struggle with SEC, customers should “stop using them now.” This was stated by the former lawyer of the department, John Reed Stark.
Get out of crypto platforms now, I can’t say it any plainer. Having worked as an attorney in the SEC Enforcement Division for almost 20 years (including 11 years as Chief of the SEC Office of Internet Enforcement), I believe that we now know for certain that crypto trading…
— John Reed Stark (@JohnReedStark) June 8, 2023
The expert reacted this way to the latest events in the industry – the prosecution of Binance and Coinbase by the department.
“I believe the SEC is excellent in its efforts to enforce laws related to digital assets. Regardless of what the “carnival barkers” promise, it is an axiom that platforms are highly risky and dangerous. […] Crypto exchanges are under siege by US regulators, and it has only just begun.” he stressed.
Stark explained that his position is based on the lack of registration. [у операторов платформ] with the SEC, indicating a lack of oversight.
“There are no gaps in customer protection, but an abyss”, Reed Stark said.
The specialist referred to the problems of crypto exchanges with record keeping, as well as their non-compliance with order flow requirements.
Reed Stark emphasized that there is no internal reason for companies to follow US laws that prohibit market manipulation, insider trading, trading against customers and other offenses.
According to the specialist, there are no requirements for cybersecurity or privacy protection, internal compliance obligations, provisions for handling customer complaints and no minimum financial standards for transactions.
Earlier, Reed Stark explained the reasons for the “failure of cryptocurrencies.”
Recall that trading volumes on CEX in May dropped to the lowest since October 2020 ~$424 billion.
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