FTX scandal obliges, the authorities of the American financial markets are beefing up their game. After the Canadian CSA, the American SEC is also raising its tone. Bad times for casinos.
The SEC takes on the SBF case
The SEC has filed lawsuits against FTX and its co-founder Sam Bankman-Fried. The latter is accused of having orchestrated “a plan to defraud investors”.
The SEC chairman didn’t mince words:
“We believe that SBF has built a house of cards on a background of deception. The alleged fraud committed by SBF is a wake-up call for exchanges to comply with our laws. »
The SEC argues that FTX “raised over $1.8 billion from investors, including approximately $1.1 billion from approximately 90 U.S.-based investors”. She also accuses SBF of having made “the promotion of FTX as a safe and responsible exchange, specifically touting its sophisticated and automated risk management”.
The complaint alleges “that in reality, Sam Bankman-Fried orchestrated a fraud for years to cover up the secret diversion of funds from FTX clients to Alameda Research, his private fund.”
Make an example of FTX
Also, the FTX exchange is accused of having “provided Alameda with a virtually unlimited, customer-funded ‘line of credit’.”
But also for not having disclosed “the risk arising from FTX’s exposure to overvalued and illiquid assets of Alameda, in particular in the form of FTT tokens”.
Gurbir S. Grewal, director of the Division of Enforcement of the SEC, said that “FTX operated behind a veneer of legitimacy that Mr. Bankman-Fried created by touting, among other things, its cutting-edge risk management.” “But this varnish was not only thin, it was fraudulent”.
“We say to all exchanges that are not complying with securities laws, the SEC is ready to take action”can we read in the communicated.
These warnings echo those of the CSA (Canadian Securities Administrators). These latter have announcement along with the SEC filing that all exchanges operating in Canada must immediately pre-register with them.
Canada has even warned that exchanges are now prohibited from providing leverage to their Canadian clients.
This measure will certainly make people disappointed. But it will ultimately protect small investors who are often washed out by criminal leverage.
Let’s hope for CZ that Binance is indeed in order and that every BTC belonging to its customers is indeed there…
A drastic reduction in leverage at the global level would have the effect of reducing volatility. It would then be much more difficult to organize pump & dump.
Shitcoins would lose their main “usecase”, finally driving the masses towards the real monetary revolution, that of Satoshi Nakamoto.
“There is no second best”…
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