U.S. Securities and Exchange Commission Chairman Gary Gensler said Wednesday that federal securities agents may continue bringing enforcement actions against crypto exchanges, even if the platforms disclose their products’ risks to retail investors.
In a CNBC interview, Gensler said crypto exchanges with disclosures aren’t immune to being sued by regulators if they are “manipulating the market.” The companies are also not protected from lawsuits if they publicize “misleading” information that leads traders to pour money into products they otherwise wouldn’t invest in, he said.
The SEC has cracked down on the digital assets industry in recent years, particularly since the collapse of crypto exchange FTX. The agency has sued Kraken and Binance and is still pursuing a civil case against the U.S.'s largest crypto exchange by daily trading volumes, Coinbase.
~When it comes to fighting market manipulation, I don't think there is a need for a new framework to cover crypto exchanges. There are laws created, prior to the emergence of crypto, against fraudulent business practices that could be applied to CEX too. Just because the product (and tech) is different, it doesn't mean there's a need for a new law.
Looking at the things he said above, what is clear is that up to now the SEC has not issued a guideline which the industry can follow to the spirit and letter...or better yet it should be asking Congress to come up with an acceptable regulatory framework where all players have to diligently follow and from where all violators will be charged and fined accordingly.
There are enough laws to protect investors and companies, and Gary’s first task is to protect investors by monitoring companies’ compliance with regulatory regulations, and it is never his duty to attack companies without a reason.
I think they are trying to push more people to use ETF and all the centralized alternatives but many will end up stopping trading and buying Bitcoin from DEXs so soon they will change their policy towards focusing their efforts on decentralized platforms.
Basically they are saying "if you promote crypto and how you could make money from crypto, and people invest into crypto via your exchange, and lose money, then they can sue you" which is something that needs some examples from other markets. If for example JP Morgan has an advertisement that says "buy apple stocks from us and be rich" and people do invest and they lose, if those people can sue JP Morgan for that ad, then I guess it makes sense that exchanges could too.
I'm not sure what is his goal by stating something obvious, especially when there are already laws about market manipulation and misleading investor. Although on other side, some exchange take risk by listing dubious or newly created coin/token. And i remember Coinbase used to auto-generate many webpage about how to buy token/coin, even for shady or unpopular ones which misused by some actor to promote certain token/coin.
There are? Like what laws?This is what I alluded to in my comment.
Do you know what Kraken and Coinbase defense was when they sold all those tokens? It boiled down to we didn't force you to buy so if it went down and you lost money it's all your fault!
Look at the ton of shitcoins exchanges that are allowing users to buy, are advertising for them, and messaging millions of followers on the day of the listing, do you honestly think they do anything other than basic research, or did they care about it while allowing trading? How many coins have been delisted from exchanges because they were scams before the rug was pulled, before the police arrested the developers, or at any time that would have protected investors from losing money?
You don't have to agree with this guy on everything or to like him but he's right on this one, this part of crypto is like the Wild West, even gambling at a casino looks sometimes safer than this!