Mark Cuban Call Out SEC For Double Standards, Says It Fails To Stop Scams
A former top official at the U.S. Securities and Exchange Commission (SEC) says that people who want to trade in digital assets should “get out of crypto platforms now.”
John Reed Stark, who started the SEC’s Office of Internet Enforcement and ran it for 11 years, says that crypto exchanges are under a US regulatory/law enforcement siege that has just begun.
Stark says that he has been critical of the SEC in the past, but he thinks that the regulator’s recent moves to enforce crypto laws have been “spot on.”
“No matter what the carnival barkers promise, it is axiomatic that crypto trading platforms are high-risk, perilous and inherently unsafe.”
The former SEC official says that there is a “chasm” between what crypto exchanges need to do to protect investors and what they actually do. As a result, there are no rules about keeping records, security, codes of behaviour, customer complaints, or order flow transactions.
Reed also says that exchanges have no reason to follow US laws and rules that ban manipulation, insider trading, trading ahead of customers, and other fraudulent behaviour by customers or employees.
He also thinks that the SEC can’t find fraud at crypto platforms right now.
“With traditional SEC-registered financial firms, the SEC has unlimited and instantaneous visibility into every aspect of operations. With crypto trading platforms, the SEC lacks any sort of oversight and access — and has scant ability to detect, investigate and deter fraudulent conduct.”
On Monday, prices for all cryptocurrencies fell after word spread that the SEC had filed a lawsuit against the largest cryptocurrency exchange in the world, Binance, and its CEO, Changpeng Zhao. The regulator says the exchange broke rules about protecting investors and selling securities.
After suing Binance, the SEC sued the biggest cryptocurrency exchange in the US, Coinbase, on Tuesday. The SEC says that Coinbase worked as an unregistered securities exchange, broker, and clearing agent.
