The current FTX management continues its efforts to resume the exchange’s activities, and appears to have gained strong support. The latest reports also suggest that former New York Stock Exchange (NYSE) Chairman Tom Farley has shown great interest in acquiring FTX and reopening the platform.
However, the main support came from the United States Securities and Exchange Commission (SEC). More specifically, from President Gary Gensler, who declared his agreement with the reopening of FTX. But for this to happen, Gensler stated that the company must operate following US laws.
Gensler eyes FTX
Gensler spoke at the DC Fintech Week event, which took place between November 6th and 8th. In his speech, the SEC president said he agrees with the reopening of operations by the current management of FTX. However, this will only happen if the current administration has a clear understanding of the law.
In May of this year, Tom Farley introduced his own digital asset exchange called Bullish. Currently, the former NYSE president is among the top candidates to acquire FTX. After all the judicial recovery, the exchange must go to auction so that interested parties can make their purchase proposals official.
“If Tom or anyone else wanted to be in this field, I would say, ‘Do it legally.’ Build investors’ trust in what you are doing and ensure you are making appropriate disclosures. Furthermore, show that you are not mixing all these functions, negotiating against your clients”, highlighted Gensler.
In principle, FTX and Alameda should maintain a strict separation, functioning as distinct entities. But evidence presented during the trial of Sam Bankman-Fried, the SBF, revealed a significant level of interconnection between the two entities.
It became clear that FTX and Alameda had a complex and worrying relationship. In this sense, FTX used client money to make risky investments using Alameda.
FTX will have to respect the law
Gensler emphasized that when contemplating new regulatory measures for the industry, existing securities laws are already “robust and effective.” The key is in your application. In other words, the SEC must be more rigorous when monitoring crimes and applying punishments.
“There is no inherent conflict between cryptocurrency and securities laws. The challenge lies in the fact that numerous global actors operate without adhering to these well-established regulations. Think about how many cryptocurrency companies are not complying with international sanctions and money laundering laws right now,” he added.
Gensler noted that over the past six years, the SEC has taken legal action in the form of lawsuits or settlements in approximately 150 cryptocurrency-related cases. Companies like Binance and Coinbase are still dealing with lawsuits filed by the regulator.