The FTX Collapse has shaken the whole crypto market.
Exchanges need to adapt to regulatory changes.
SEC to crackdown crypto firms that violate rules
The catastrophic collapse of the FTX exchange was one of the most stunning incidents. Though the ex-CEO of FTX has now been granted bail for $250 million.
The string of tragic incidents in the bitcoin space has aroused global policymakers. The US Securities and Exchange Commission has also started strengthening regulations in an effort to prevent another FTX incident. Gary Gensler , the SEC chair, said that the SEC’s crypto crackdown is just getting started.
The SEC's tolerance is running out, according to Gensler, as more exchanges for digital assets break the rules. Gensler stated that “The runway is getting shorter to start following rules and register with the agency.” The casinos in this ‘Wild West’ are non-compliant intermediaries,” said Gensler.
In the interview, he was asked for more information about the scrutiny and the way the probe was going, but he declined. Sam Bankman-Fried and two of his associates, Gary Wang and Caroline Ellison, were also called out by the SEC for scamming investors. He also chastised them for giving the outside world a false and exaggerated picture of FTX.
In the interview, Gensler also discussed the proof-of-reserve reports. He criticised the fact that a company's assets and liabilities are not fully disclosed in the proof of reserves. He further stated that the audit process does not adhere to the securities law's requirement for segregating customer cash.
Additionally, it was previously reported that Caroline Ellison and Gary Wang of FTX admitted guilt to the accusations against them. The complaint also draws attention to the SEC's designation of FTX's FTT token as a security.
Read also: Are No More Proof-of-Reserves Reports Going Forward? SEC Reports
