In crypto conversations this week, FTX’s potential sell-off of $100m has come under threat from the US Securities and Exchange Commission, which has a track record of suing crypto platforms for acting as financial exchanges.
According to Forbes, FTX is currently perched atop an approximate total of $3.3bn Solana, Bitcoin, and other cryptocurrencies. The company was granted judicial approval to begin liquidating its recovered crypto, which was lost when its former CEO and founder, Sam Bankman-fried, committed wire fraud, of which he was found guilty.
John Reed Stark, former chief of the SEC’s internet enforcement office, noted that the trial verdict is:
In March 2022, the Commodity Futures Trading office of the SEC won its battle against Binance and sued the company for its alleged illegal access to US customers, as well as its knowledge and facilitation of illegal trading activities. It’s currently engaged in a lawsuit against Coinbase, wherein the SEC claims the crypto brokerage is acting as a financial exchange rather than a provider of crypto brokers. The SEC has also discredited both Coinbase and Binance for listing their digital assets as unregistered securities.
According to the SEC:
Binance’s founder Changpeng Zhao […] publicly claimed that US customers were restricted from transacting on Binance.com. Zhao and Binance in reality subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform.
FTX can now only anticipate the repercussions that it may feel from the SEC’s iron fist after the tight clamping down on crypto assets, wallets, brokers and brokerages.