Former SEC Official Warns SBF Conviction Is ‘Just the Tip of the Iceberg’ for All of Crypto

The U.S. Securities and Exchange Commission’s erstwhile caput of net enforcement says the condemnation of ex-FTX CEO Sam Bankman-Fried (SBF) is “just the extremity of the iceberg” for the full crypto industry. “People should not deliberation that it’s harmless to spell backmost successful the h2o … It’s a mammoth House of Cards,” helium stressed, asserting that crypto, web3, and blockchain are each “nonsense.”

‘This Is Just the Tip of the Iceberg’

Former U.S. Securities and Exchange Commission (SEC) authoritative John Reed Stark discussed his position of the crypto manufacture pursuing the condemnation of erstwhile FTX CEO Sam Bankman-Fried (SBF) successful an interrogation with CNBC connected Friday. The assemblage delivered a verdict connected Thursday aft a month-long trial, uncovering Bankman-Fried blameworthy of each 7 charges.

Stark is presently president of cybersecurity steadfast John Reed Stark Consulting. He founded and served arsenic main of the SEC Office of Internet Enforcement for 11 years. He was besides an SEC enforcement lawyer for 15 years. He said connected Friday that the swift condemnation of Bankman-Fried is “metaphorical successful a consciousness for each of crypto,” warning:

This is conscionable the extremity of the iceberg. People should not deliberation that it’s harmless to spell backmost successful the water. It’s not safe. It’s a mammoth House of Cards.

“If you look astatine crypto, web3, blockchain — it’s each nonsense,” helium opined. The erstwhile SEC authoritative besides claimed that crypto, including bitcoin, does not assistance the unbanked.

“It is portion of immoderate Ponzi scheme,” helium continued. “If you look astatine web3, it’s conscionable selling blather. You look astatine crypto, it’s mathematical, computational blather. It represents nothing. There’s nary currency flow, there’s nary earnings, there’s nary equilibrium sheet, there’s thing to it.” The erstwhile SEC authoritative further told the quality outlet: “Crypto is not innovation … The iPhone, that’s Innovation. The internet, the cloud, AI — those are innovations.”

Stark has repeatedly warned astir the imaginable illness of the crypto industry. In June, helium advised investors to get retired of crypto platforms now. “I can’t accidental it immoderate plainer. I judge that we present cognize for definite that crypto trading platforms are nether a U.S. regulatory/law enforcement siege which has lone conscionable begun,” helium cautioned. He besides warned that a crypto regulatory onslaught volition ne'er end. In addition, helium precocious urged the U.S. Department of Justice (DOJ) to take action against crypto firms, suggesting that “crypto-grifters” request to “face the menace of DOJ prosecution (i.e. situation time).”

Nonetheless, the erstwhile SEC net enforcement main anticipates exponential shifts successful crypto regulations aft predetermination day. “Should a Republican get elected President, Chair Gensler would apt resign and the elder Republican appointed SEC Commissioner (in this lawsuit famed ‘crypto-mom’ Hester Peirce) would perchance go acting chair,” helium predicted.

What bash you deliberation astir the warnings by erstwhile SEC net enforcement main John Reed Stark? Let america cognize successful the comments conception below.