The head of the US Securities and Exchange Commission (SEC) is reportedly saying that a crackdown on the crypto industry is imminent following the highly publicized collapse of FTX.
According to a new report from Bloomberg, SEC Chairman Gary Gensler says the regulator is pursuing crypto companies that don’t follow its rules, comparing such companies to casinos.
“The runway is getting shorter. The casinos in this wild west are non-compliant intermediaries.”
He also says that the trend of crypto exchanges proving they have reserve assets to safeguard their customers’ funds means nothing as the practice falls short of current regulatory disclosure standards.
“Evidence of reserves is not a full accounting of a company’s assets and liabilities, nor does it satisfy segregation of customer funds under securities laws.”
According to Gensler, regulators should focus on ensuring that crypto firms segregate their funds and their clients’ funds and keep accurate records of all transactions.
“There are some in this space who have spoken about how to give customers confidence that their crypto is really there. They should do so by adhering to best practice custody, segregation of client funds and accounting rules.”
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