Former SEC officer: Crypto-casinos will be brought down
There’s plenty wrong with the cryptocurrency industry, but you don’t have to take it from us. John Reed Stark, a cybersecurity expert and 20-year veteran of the Securities and Exchange Commission (SEC) wrote a scathing analysis of what’s wrong with it for Law360, and a lot of it is the exchanges’ fault.
He begins with the new concept of Initial Exchange Offerings (IEOs), better described as the recent trend of exchanges offering their own digital currency to profit more from the market. Stark doesn’t take kindly to this, calling it an “unregulated crypto-casino fundraising mutation.”
This kind of offering, best exemplified by Binance Coin (BNB), is something the SEC is tracking and will crack down on in due time. He added:
“IEOs represent yet another blatant attempt to hijack a similar-sounding acronym—IPO—in an effort to lure investors seeking to get rich quick. However, just like ICOs, the IEO has not a single element in common with the IPO (other than the first and last letters of its acronym).”
He also pointed to the rampant use of many digital currencies, like Bitcoin Core (BTC) or Monero (XMR), as tools of criminals to hide their activity. “Need a way to collect a ransomware payment?” he asked. “Need to fund terrorist-related activities? Need to hire a hitman? Cryptocurrencies like bitcoin have become the payment of choice for these, and a slew of other, criminal enterprises.”
The reason these exchanges and cryptocurrencies won’t last, Stark concluded, are because they are so obviously tied to criminality. They distance themselves from proper oversight and regulation, and as a result, the SEC and other government bodies are eventually going to crack down hard on them, limiting their potential for future global adoption.
The only digital currency working to seriously correct this problem, and seeking better regulation and oversight, is Bitcoin SV (BSV). Because Dr. Craig Wright, Bitcoin’s inventor, wanted to build a digital currency that was private, but not anonymous, BSV provides the full accountability necessary for a government to hunt down criminals who use it, while providing the stability and scalability necessary for businesses to build with.