A crackdown on the cryptocurrency business is apparently on the horizon following the collapse of FTX, according to the chairman of the U.S. Securities and Exchange Commission (SEC).
In a recent Bloomberg report, SEC Chair Gary Gensler claims that the regulatory body is going after cryptocurrency firms that don’t follow its laws and equates such businesses to casinos.
“The runway is getting shorter. The casinos in this Wild West are non-compliant intermediaries.”
Additionally, he claims that the practice of crypto exchanges demonstrating reserve assets to support their consumers’ money is meaningless since it does not adhere to current regulatory disclosure rules.
“Proof of reserves is neither a full accounting of the assets and liability of a company, nor does it satisfy segregation of customer funds under the securities laws.”
Gensler believes that authorities should concentrate on ensuring that cryptocurrency companies retain accurate records of all transactions and keep their assets distinct from their clients.
“There are some in this field that have talked about ways to give customers confidence that their crypto is really there. They should do that by coming into compliance with time-tested custody, segregation of customer funds rules and accounting rules.”