The SEC chair has stated that they are cracking down on cryptocurrency companies who violate their rules.
The SEC chairman also suggested that the agency will continue to scrutinise crypto companies' financial records beyond the PoR report on their websites.
Against cryptocurrency companies who disobey their guidelines.
The cryptocurrency market has seen a roller coaster year in 2022. The market has experienced everything, from the demise of the Terra ecosystem in May to the latest fiasco of the FTX crypto exchange. These disastrous occurrences have further encouraged the U.S. SEC to adopt a harsher stance on enterprises connected to the cryptocurrency industry and crypto assets in general.
The proof-of-reserves reports that some cryptocurrency businesses provide to show that they have enough cash on hand to sustain customer deposits also offended Gensler. Gensler claims that the approach, which has been embraced by important cryptocurrency firms including the industry titan Binance, falls short of the disclosures necessary to protect investors.
Some experts in this industry have discussed strategies to reassure customers that their cryptocurrency is actually present. They ought to comply in order to accomplish it.
Furthermore, the SEC chairman's remarks hinted that the agency will keep paying close attention to how these crypto enterprises record their finances rather than just the PoR report that is published on their website.
In a recently aired interview, Gary Gensler, the head of the Securities and Exchange Commission (SEC), said that the organization's tolerance for cryptocurrency companies that circumvent its regulations was waning.
The US banking watchdog sued two additional well-known cryptocurrency executives on Thursday for their alleged participation in the collapse of the FTX exchange. In a statement, the SEC said that allegations of fraud against Gary Wang, a co-founder of the cryptocurrency exchange, and Caroline Ellison, the head of FTX's trading division Alameda Research, had been resolved. The trading company based in Hong Kong allegedly exploited deposits from FTX customers worth billions to finance its dangerous wagers.
The runway is getting shorter, according to SEC Chair Gary Gensler. The casinos in this Wild West are non-compliant intermediates, suggesting crypto businesses.
Gensler provided several industry-wide cautions notwithstanding his refusal to identify the companies under investigation or make any predictions about the course that the FTX probe may go. According to the SEC chairman, the majority of tokens are essentially just unregistered securities that are traded on the blockchain. He claims that in order to stay in compliance, they must follow the organization's tight trading and investment rules.
Many of the tens of thousands of cryptocurrencies listed on marketplaces and websites that monitor the markets for digital assets are thinly traded, according to Gensler. He continued by saying that insiders on these ventures might sell the public on a concept while they may be inflating the price dishonestly.
