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Media personality and Fox Business Network's Senior Correspondent Charles Gasparino has shared his insight into the new disposition of the United States Securities and Exchange Commission (SEC) on the crypto ecosystem. According to Gasparino, a number of securities lawyers and past officials of the SEC say the regulator is looking to largely "cut off" crypto in all its forms after the FTX debacle.
The community is still riled up by the complicit nature of the SEC with respect to the undetected fraud in the FTX exchange that led to its eventual bankruptcy. Whether or not the regulator is using its current crackdown on crypto as a way to make up is unclear, Gasparino confirmed a number of Wells Notices have been issued with the intent of bringing cases.
BREAKING per @EleanorTerrett & my reporting: Securities lawyers including a past top @SECGov official say SEC looking to largely "cut off" crypto in all its forms after FTX debacle. @SEC_Enforcement has "blanketed" crypto w so-called Wells Notices signaling intent to bring cases
— Charles Gasparino (@CGasparino) February 14, 2023
The renewed stance of the regulator was showcased when it fined Kraken exchange the sum of $30 million for offering its customers staking services. While the enforcement action did not cause an immediate change in the exchange's trading volume, it promptly complied and halted the offering.
Alex DovbnyaA related enforcement action was recently picked up against Paxos, the issuer of the Binance USD (BUSD) stablecoin.
Fate of crypto
Top proponents of the digital currency ecosystem have lamented what they call a harsh and misguided regulatory approach by the SEC. With criticism mounting, industry experts are having to prepare for the worst-case scenarios to defend their customers and products against all undue misinterpretation from the SEC.
While Paxos has stated that it disagrees with the regulator's classification of the BUSD stablecoin as a security, the firm said it is prepared for litigation if it comes to that. A similar sentiment has been echoed by Coinbase CEO Brian Armstrong, who noted it is ready to go to court should the SEC file any enforcement actions against its staking service.
Dan Burgin
Yuri Molchan
Alex Dovbnya
Vladislav Sopov