Former SEC Executive: Regulatory Attacks On Crypto Will Not End

US regulators are said to be unable to stop attacking the cryptocurrency industry. (Photo; Doc. Unsplash)

JAKARTA - John Reed Stark, a former US Securities and Exchange Commission (SEC) official, has voiced concern about the regulatory attacks being faced by the crypto industry.

In a long series of tweets, Stark outlined his views on enforcement measures taken by the SEC against cryptocurrency exchanges, as well as the broader implications of the action.

Stark, who currently serves as president of cybersecurity firm John Reed Stark Consulting, has extensive experience in crypto regulation and law enforcement. He highlighted recent actions against the Bittrex exchange and indicated that similar actions had been taken against other crypto exchanges such as Coinbase and Binance.

Stark revealed that these platforms use the term "burst," "pialang," and "market makers" (market makers) to acquire reputations that reflect consumer scrutiny and protection, while historically have strong implications in traditional financial worlds.

Furthermore, he noted that when Congress founded the Securities and Exchange Act in 1934, its goal was to prevent investment schemes regulated by large financial entities. He argues that the fast-growing crypto market needs to be monitored so as not to become a place for fraud and abuse.

Stark underlined that the SEC's triple mandate task (protecting investors, maintaining a fair and regular market, and facilitating capital formation) will ensure that regulatory attacks on crypto will not stop.

It didn't stop there, the former SEC official also discussed the importance of SEC stock exchange registration and broker-dealer registration for crypto platforms that list tokens that are considered securities. He referred to SEC Chair Gary Gensler's statement claiming that almost all crypto tokens, except Bitcoin, could be considered securities. However, Stark pointed to the court's decision to determine that XRP is not a security.

In his tweets, Stark also highlighted the activities of crypto trading companies that are considered to have operated as exchanges without proper registration. He confirmed that these platforms have ignored the fact that some crypto-traded assets are securities.

On the other hand, Stark acknowledged the need for regulation to prevent abuse and protect investors, he also expressed concern about the potential impact of intense regulatory action on the crypto industry. His views reflect ongoing debates about how appropriate regulations can be applied in this growing ecosystem.