What's the worst that could happen?
The head of the Securities and Exchange Commission has said that it's chill for FTX to be rebooted — as long as whoever does it follows the law for a change.
In an interview with CNBC, SEC chair Gary Gensler responded — forgive us — bullishly to reports that former New York Stock Exchange president Tom Farley is reportedly shortlisted to buy the remnants of FTX.
"If Tom or anybody else wanted to be in this field, I would say, 'Do it within the law,'" Gensler told the website when approached at DC Fintech Week in Washington. "Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers, or using their crypto assets for your own purposes."
Just a week after FTX founder Sam Bankman-Fried was found guilty on seven counts related to the billions of dollars pilfered from the company — and nearly a year since the exchange collapsed dramatically last November — the Wall Street Journal reported that Farley's crypto company, Bullish, is being considered as one of three contenders to buy the exchange at auction.
Beyond Bullish, the other firms being considered to buy FTX are fintech startup Figure Technologies, which laid off 90 percent of its staff this summer as it prepared to go public, and the crypto-centric venture capital company Proof Group.
Charges on Charges
Along with the Justice Department's criminal trial against Bankman-Fried, both the Commodity Futures Trading Commission and the SEC have brought civil suits FTX, with the latter accusing SBF of running a "brazen, multi-year scheme" in its December 2022 filing.
Despite those charges, the SEC's chair insists that as long as the next leaders of FTX follow the rules and keep it above board, there shouldn't be any issue.
Curiously, Gensler also seemed to suggest that his fellow financial regulators may be dropping the ball when it comes to making sure that the crypto sphere doesn't continue to be a "wild west" of fraud and corruption, telling CNBC that existing laws are "very robust and strong" — and that enforcement and compliance are key.
"There’s nothing about crypto that’s incompatible with securities laws," Gensler said. "You’ve got just a lot of worldwide actors that are currently not complying with these time-tested laws."
Nobody's gonna argue with the idea that crypto is still very much full of bad actors — but the optics of rebooting the most publicly fraudulent crypto firm in history are obviously dismal.
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