Former Securities and Exchange Commission (SEC) official John Reed Stark has urged cryptocurrency investors to "get out now" in response to a Bloomberg article detailing the increasingly aggressive U.S. regulatory stance toward the industry.
Stark, who now runs a cyber consultancy, tweeted that the "crypto-ecosystem is under siege" as a result of "relentless" regulatory actions that could see the industry "pushed to the fringes of finance."
The Bloomberg article cited by Stark claims that the collapse of FTX and the potential for the next "crypto disaster" to have even more severe consequences are the driving force behind the ongoing crackdown.
U.S. financial regulators are said to be closing doors to the traditional financial system, making it harder for crypto companies to secure banking partners. Reports are suggesting that they are creating a wall between crypto trading and the securities and banking markets in order to avoid another financial crisis.In response to regulatory actions, investors are said to be exiting the crypto space, with Bitcoin declining for two consecutive weeks.
Binance, the world's largest cryptocurrency exchange, has already felt the squeeze, with stablecoin issuance being halted.
As reported by U.Today, Senator Elizabeth Warren, the leader of the progressive Democrats, is building an anti-crypto coalition with some Republicans.
The crackdown has prompted fears of a wider sell-off on the crypto market. Despite these concerns, U.S. officials have denied that they are trying to crush the industry, stating that responsible innovation will be supported.