On December 22, Bloomberg published a report on the SEC’s plans for the crypto industry, following the collapse of FTX. The report features recent statements by the SEC Chairman. It appears that the regulator intends to toughen its policy in the new industry.
Gary Gensler talks about the uselessness of PoRs
Last week, Gary Gensler made it clear that the SEC will step up the crackdown on cryptos. In parallel, an article from Bloomberg reveals a statement from the SEC Chairman on evidence of reservations. Indeed, according to Gensler, the publication of the PoR means absolutely nothing. Crypto exchanges should not adopt this practice which does not meet current regulatory disclosure standards.
To this effect, the Chairman of the SEC said: Proof of reserves neither constitutes a complete accounting of a company’s assets and liabilities nor satisfies the segregation of client funds under securities laws. “. Additionally, he considers non-compliant crypto businesses to be casinos. “The casinos in this Wild West are the non-compliant intermediaries”he said.
Separately, Gensler believes that regulators should ensure that crypto companies separate their funds from those of their customers. He adds that crypto businesses must keep accurate records that show all transactions.
He explained : ” There are those in this field who have talked about ways to give customers confidence that their crypto is really there. They should do so by complying with proven custody, segregation of client funds and accounting rules. “.
The SEC, a ruthless regulator?
On December 22, Gary Gensler suggested through a tweet that the SEC will do everything possible to protect crypto investors. He stated : ” Until crypto platforms comply with proven securities laws, the risks for investors will persist. The SEC makes it a priority to use all the tools at its disposal to bring the industry into compliance “.
So far, the SEC has given the impression of chasing down crypto companies without solid evidence. The regulator notably sued Ripple and other companies. At the same time, the crypto community criticizes him for failing to protect investors in the FTX affair.
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