The head of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has suggested that he would consider the reopening of cryptocurrency exchange FTX, provided its new leadership adheres to legal boundaries. Gensler specifically targeted Tom Farley, former New York Stock Exchange chief, who is currently leading cryptocurrency exchange Bullish and vying to acquire FTX, the bankrupt cryptocurrency exchange founded by Sam Bankman-Fried, now convicted of fraud. Gensler emphasized the importance of conducting operations within the legal framework, building investor trust, ensuring appropriate disclosures, and avoiding the misuse of clients' crypto assets.
FTX has attracted bids from various entities, including Bullish, Fintech startup Figure Technologies, and cryptocurrency venture capital firm Proof Group. The winning bidder may relaunch FTX after exiting bankruptcy next year. Gensler's remarks come in the context of Bankman-Fried's conviction, highlighting the prevalence of fraud in the cryptocurrency industry. He expressed concern about non-compliant actors, urging measures to keep them away from investors and emphasizing the need for compliance with international sanctions and anti-money laundering laws.
While the SEC under Gensler has been actively pursuing legal actions against major players in the cryptocurrency industry, including Binance, Coinbase, and Ripple, U.S. Representative Tom Emmer has criticized the SEC for allegedly ignoring the failures of platforms like FTX, Terra-LUNA, Celsius, and Voyager. Emmer accused Gensler of aiding Bankman-Fried in gaining a "regulatory monopoly" in the cryptocurrency industry before FTX's collapse. However, this claim lacks supporting evidence. The SEC is currently engaged in legal battles, including a lawsuit against Grayscale's application to convert its Bitcoin trust product into a spot Bitcoin exchange-traded fund.
