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SEC Could Approve FTX Reboot by Former NYSE President

2 mins
Updated by Kyle Baird
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In Brief

  • SEC Chair Gary Gensler hints at potential approval for the revival of crypto exchange FTX, given adherence to regulatory compliance.
  • Former NYSE president Tom Farley, one of the potential bidders for FTX, emphasizes the need for regulatory compliance in the crypto industry.
  • The possible reboot of FTX under new leadership could set a precedent for future crypto exchanges, stressing regulatory compliance and investor trust.
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The Securities and Exchange Commission (SEC) could approve the revival of the embattled crypto exchange FTX, provided the new leadership operates within the law, according to SEC Chair Gary Gensler.

This statement comes amid a potential acquisition of FTX by former New York Stock Exchange (NYSE) president Tom Farley. FTX, previously entangled in allegations of fraud and bankruptcy, is currently considering binding offers from three potential bidders.

Could the SEC Greenlight an FTX Comeback?

In a recent interaction with CNBC during DC Fintech Week, Gensler emphasized the importance of regulatory compliance for new leadership. He stated,

“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 doing the 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.'”

Farley, who launched his digital asset exchange Bullish in May, is among the three bidders vying for the bankrupt FTX. His bid emphasizes the need for regulatory compliance in the crypto industry. Gensler also shares this sentiment, believing the existing securities laws are “very robust and strong” and must be enforced.

Overall, FTX’s troubled past involves founder Sam Bankman-Fried, who was found guilty on seven criminal counts, including fraud and money laundering. Prosecutors accused his exchange of funneling customer money to sister hedge fund Alameda Research. This led to a breakdown in trust and the exchange’s eventual bankruptcy.

The Next Chapter for FTX?

Kevin M. Cofsky of Perella Weinberg Partners is the investment banker representing FTX. He revealed that they will finalize decisions on the way forward for FTX by mid-December.

The options on the table include selling the entire crypto exchange, which boasts a valuable customer list of more than 9 million, or forming a partnership to restart the exchange.

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

All in all, as FTX navigates a potential revival, adherence to regulatory compliance and building investor trust will be important. This development also underscores the importance of operating within the law, a sentiment strongly advocated by Gensler, who stated,

“There’s nothing about crypto that’s incompatible with securities laws. You’ve got just a lot of worldwide actors that are currently not complying with these time-tested laws.”

Top crypto platforms in the US | February 2024
Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

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Kyle Baird
Kyle migrated from the East Coast USA to South-East Asia after graduating from Pennsylvania's East Stroudsburg University with a Bachelor of Science degree in 2010. Following in the footsteps of his grandfather, Kyle got his start buying stocks and precious metals in his teens. This sparked his interest in learning and writing about cryptocurrencies. He started as a copywriter for Bitcoinist in 2016 before taking on an editor's role at BeInCrypto at the beginning of 2018.
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