SEC Chair Backs FTX Reboot According To Existing Regulations
Gensler Greenlights FTX’s Revival
The US Securities and Exchange Commission (SEC) Chairman, Gary Gensler, has stated his willingness to consider a reformed version of the troubled crypto exchange FTX as long as its new leadership adheres to legal regulations. Gensler’s statement follows reports that Tom Farley, a former president of the New York Stock Exchange, is among those aiming to buy the bankrupt crypto exchange founded by convicted former CEO Sam Bankman-Fried.
During an interview at DC Fintech Week on November 8, Gensler stated that if Tom or anyone else seeks to be in this field, he would only allow it within the law. This development indicates the SEC’s cautious stance toward the potential reemergence of FTX under new leadership.
Gensler’s emphasis on legal boundaries highlights the regulatory scrutiny and oversight that the crypto industry faces, particularly where it intersects with traditional financial markets. Any potential reintroduction of FTX will be closely monitored to ensure compliance with existing regulatory frameworks.
FTX’s Potential Buyers
In addition to Farley’s bid, fintech startup Figure Technologies and crypto venture capital firm Proof Group have expressed interest in purchasing FTX. This information comes from a Wall Street Journal report that cited insider sources familiar with the ongoing negotiations.
With plans for a strategic exit from bankruptcy slated for next year, the prospective winner of the FTX acquisition could pave the way for a resurgence of the exchange. The new leadership will likely chart a course that aligns with evolving regulatory and market dynamics, which has significant implications for the crypto industry.
Gensler Highlights Prevalence Of Crypto Fraudsters
Following Bankman-Fried’s conviction, the SEC chair expressed concern about the continued prevalence of fraudulent activities in the crypto industry. Thus, Gensler emphasized the need for additional safeguards to protect investors from dishonest players.
Without naming individuals or companies, Gensler said several crypto entities are violating international sanctions and anti-money laundering regulations. Also, they are leveraging virtual currencies to carry out illegal transactions.
Despite the SEC’s stringent crackdowns in the crypto sector, US Rep member Tom Emmer slammed Gensler and the regulatory body for their strict approach. Emmer also cited the SEC’s oversight actions on FTX, Celsius, Terra-LUNA, and Voyager, which resulted in substantial financial losses for crypto investors totaling billions of dollars.
The lawmaker implied that Gensler may have granted Bankman-Fried an unwarranted “regulatory monopoly” over the cryptocurrency industry before FTX’s bankruptcy. However, he couldn’t support his claim with any evidence.
The regulator is embroiled in legal battles with major industry players, including Binance, Ripple, and Coinbase. Per the SEC, the primary reason for the several lawsuits between the regulator and key players in the crypto space is over alleged securities violations.
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