SEC Chair Gary Gensler said the agency would greenlight the reboot of the exchange if “Tom or anybody else” did it within the law.
In an encouraging development, the US Securities and Exchange Commission (SEC) has hinted at the possibility of approving the revival of the beleaguered cryptocurrency exchange FTX, if the incoming leadership adheres strictly to regulatory guidelines.
The revelation follows reports that former New York Stock Exchange (NYSE) president Tom Farley was among a shortlist of three potential buyers bidding to acquire the distressed exchange after its founder, Sam Bankman-Fried, was convicted last week.
SEC Chair and His Vision on FTX Revival: Adherence to Regulatory Guidelines
During a recent interview with CNBC at DC Fintech Week, SEC Chair Gary Gensler said the agency would greenlight the reboot of the exchange if “Tom or anybody else” did it within the law.
He also urged prospective stakeholders to build trust among investors and ensure that trading activities do not violate customer interests or involve misusing their digital assets.
“If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law.’ Build the trust of investors in what you’re doing and ensure that you’re making 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,” he said.
Apart from Farley, the CEO of the crypto exchange Bullish, the other two corporate entities bidding for the potential acquisition of FTX are fintech startup Figure Technologies and digital assets venture capital firm Proof Group. According to a recent Wall Street Journal report, the lucky winner will have the opportunity to reboot the fallen exchange after its planned exit from bankruptcy next year.
FTX to Reach Final Decisions on Restructuring Plan Next Month
FTX, one of the largest crypto exchanges in the world, hit rock bottom last year after suffering a brief liquidity crisis and ultimately filed for bankruptcy in late November 2022.
The troubled history of FTX revolves around its founder, Sam Bankman-Fried, who faced a conviction on seven counts, including charges of fraud and money laundering. The former FTX CEO had initially pleaded not guilty to any of the criminal charges, including allegations that the exchange had been channeling customer funds to its sister hedge fund, Alameda Research.
The company is now in the process of restructuring, which includes the potential change of ownership to pay back creditors. Representing FTX in its restructuring process, Kevin M. Cofsky from Perella Weinberg Partners disclosed that final decisions on the future course of action for the exchange will be made next month.
The available options range from a complete sale of the crypto exchange, boasting a user base exceeding 9 million, to the exploration of strategic partnerships for the potential relaunch of the platform.
Crypto Is Not Incompatible with Existing Securities Laws
Meanwhile, Gensler also discussed general crypto oversight during the discussion with CNBC. According to him, when considering new rules for regulating the industry, existing securities laws are “very robust and strong” but must be enforced.
The SEC chair further stated that existing securities laws are well suited to regulate the emerging economy. “There’s nothing about crypto that’s incompatible with securities laws. You have a lot of worldwide actors currently not complying with these time-tested laws,” said he.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.