By Roslyn Layton. December 1, 2022. (Forbes)
Following the collapse of FTX, the second largest digital asset exchange in the world, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler repeated sensless talking points about crypto regulation, insisting that SEC rules are “very clear” on crypto and that FTX, like Terra Luna and Celsius before it, failed because they were “not registered”. Even as hundreds of billions of dollars in investor holdings vaporize, and the evidence of staggering fraud at FTX was quickly apparent, Gensler still believes that investor protection in crypto begins and ends with a still-yet-undefined (and maybe impossible) process of registering cryptocurrencies.
Few, if any understand what Gensler is talking about. There is no guide on how a line of code that is used on a decentralized blockchain ledger can be registered as a security, or under what circumstances, or who files the forms, how frequently, or what information needs to be included, or what it is supposed to accomplish. Moreover, instead of publishing those rules that Gensler repeatedly insists are “very clear”, his SEC opts to selectively sue companies and individuals. It has been an expensive, grindingly slow, and messy failure, while the FTXs of the world destroy retail investor wealth – and faith in the crypto marketplace – at an enormous scale and speed.