SEC Regulator Attitudes Towards Crypto are Worse Than You Think
To paraphrase a line, when they tell you who they are or what they plan to do, listen. The former founder and chief of the US Securities and Exchange Commission’s Office of Internet John Reed Stark says an SEC “regulatory onslaught” is just beginning.
Stark is no low-level SEC functionary. The former SEC enforcement attorney led cyber-related projects, investigations, and enforcement actions no longer has his hands on the levers of power – he’s retired from government and now runs a cybersecurity consulting firm – but he reflects an attitude too common coming from the SEC.
He stated Thursday in a tweet that the SEC “hit Blockfi for failing to register its crypto-lending program, stopped Coinbase from launching its crypto-lending program, and Just hit Gemini/Genesis for its Earn crypto-lending grift.” (The SEC alleges crypto exchange Gemini and crypto lender Genesis performed “unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program”)
He added, “Buckle up: An SEC regulatory onslaught is just beginning.” Stark is a longtime and outspoken skeptic of crypto, regularly making the rounds on social media and business talk shows to disparage the crypto industry. “In crypto-land, the Ponzi shell game continues & a death spiral may have now begun,” he tweeted. “Fail not at your peril crypto investors.”
Again, we don’t expect any industry regulators to be cheerleaders, but when the bigger names and policymakers in regulation are this openly hostile to an industry, that’s a serious bias problem.