John Reed Stark, an attorney with 15 years of experience at the U.S. Securities and Exchange Commission (SEC) strongly advocates for the intervention of the Department of Justice (DOJ) in addressing cryptocurrency scams. According to Stark fraudulent individuals in the world appear to not take the SECs enforcement actions enough. He expressed concern about the lack of DOJ involvement in prosecuting cryptocurrency related frauds especially when compared to the SECs frequent enforcement actions. Stark finds this difference quite puzzling.
Furthermore Stark highlighted that some known figures in the cryptocurrency industry have shown a dismissive attitude towards the authority of the SEC. Specifically he mentioned Binance, Coinbase and Tyler Winklevoss from Gemini as companies currently engaged in battles with the SEC. However Stark noted that both Coinbase and Binance seemed to perceive these lawsuits from the SEC as some sort of “badge of honor.” Tyler Winklevoss, one of Geminis co founders simply disregarded the SECs case against his company as “not credible.”
Reed firmly believes that without DOJ prosecutions looming over them more crypto businesses will view the SECs actions as another financial obstacle to overcome. He emphasized that although primarily a civil regulatory body it is crucial for there to be involvement from law enforcement agencies, like DOJ when dealing with fraudulent activities.
Crypto scammers won’t truly grasp the seriousness of SECs interventions until they face the consequences of DOJ actions, which could ultimately lead to imprisonment. For them injunctions and fines are merely considered as costs.
On another note I find it surprising that Sam Bankman Frieds parents, Joseph Bankman and Barbara Fried are not implicated in the FTX lawsuit. The lawsuit alleges that they utilized their family connections to acquire funds from FTX.
Sam Bankman Fried, the CEO of FTX is set to stand trial on October 3rd following FTXs downfall in November 2022. He is currently facing charges. Maintains his innocence.
During a conflict with billionaire Mark Cuban Stark vehemently denied any insinuation by Cuban that the SEC played a role in FTXs decline. Instead Stark expressed support for the SECs efforts in safeguarding investors against financial losses. Additionally he criticized exchanges, for disregarding regulatory guidelines and operating without proper registration.