SEC chair backs reboot of FTX ‘within the law’

The revival of FTX is possible if the new leadership conducts the process with a clear understanding of the law. This was stated by the chair of the SEC Gary Gensler in an interview with CNBC at the DC Fintech Week conference.

“Build investor trust in your operation and ensure you disclose the appropriate information, and do not conflate these functions by trading against your clients or using their crypto assets for personal purposes,” the official said.

In his words, if former NYSE president Tom Farley or ‘someone else’ wants to reboot FTX, it must be done ‘within the law’.

Gensler singled out Farley because he had entered the list of three potential bidders to buy the bankrupt trading platform.

On November 2, jurors found guilty of all counts against former FTX chief executive Sam Bankman-Fried. The court is scheduled to hand down the final sentence on March 28, 2024.

The head of the SEC stressed that his agency would never permit the New York Stock Exchange to run a hedge fund with lax oversight or to trade against clients.

In Gensler’s view, when it comes to considering new rules governing the industry, the existing securities laws are ‘very robust and strong,’ so they simply need to be followed.

At the same conference, the Commission chair warned of numerous fraudsters in the crypto industry.

“This is not a single incident or one outright fraudster; it concerns several outright fraudsters,” said Gensler.

When discussing use cases and investor protection, the official highlighted the need to understand usability for ‘15 to 2,000 tokens individually’.

In October, creditors and FTX management approved a plan under which clients would be able to recover $9.2 billion by mid-2024.

In the same month, the exchange leadership began considering three options for restructuring the platform.