John Reed Stark, a former high-ranking official at the U.S. Securities and Exchange Commission (SEC), has warned crypto investors to “get out” of crypto platforms due to an ongoing regulatory and law enforcement crackdown.
In a blog post, Stark said that crypto platforms are “high-risk” and “perilous” due to a lack of investor protections and oversight. He pointed to the recent lawsuits filed by the SEC against Binance and Coinbase as evidence of the growing regulatory scrutiny of the crypto industry.
“The SEC is coming for crypto platforms,” Stark wrote. “If you’re an investor, my advice is to get out now.”
Stark’s warning comes as the crypto market is reeling from a recent crash in prices. The price of Bitcoin, the largest cryptocurrency, has fallen by more than 70% from its all-time high in November 2021.
The crash has been attributed to a number of factors, including rising interest rates, inflation, and the ongoing war in Ukraine. However, Stark believes that the regulatory crackdown is also playing a role.
“The SEC’s enforcement actions are sending a clear message to crypto platforms: you’re not above the law,” Stark wrote. “If you’re a crypto platform, you need to take steps to protect your investors or you’re going to get sued.”
Stark’s warning is likely to have a chilling effect on the crypto industry. Many investors are likely to heed his advice and exit the market. This could lead to further price declines and could make it more difficult for crypto platforms to raise capital.
The regulatory crackdown on crypto is likely to continue in the coming months. This could lead to more lawsuits, more fines, and more restrictions on the industry. Investors who are considering investing in crypto should carefully weigh the risks and rewards before doing so.