SEC close to banning crypto-currencies following FTX’s dramatic collapse!

The dramatic collapse of the crypto-currency exchange FTX last month sent shockwaves through the entire crypto-currency industry. Millions of FTX users lost their hard earned money trading with FTX.

The situation with FTX has prompted the SEC to gather enough legal ammunition that could lead to the consideration of a ban on digital assets and other centralized crypto exchanges.

Earlier this week on Wednesday, the U.S. Securities and Exchange Commission (SEC) announced charges against two major allies of FTX founder Sam Bankman-Fried. They are FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison. The duo pleaded guilty before federal authorities.

SEC: FTX token (FTT) is a security

In a separate development, the SEC declared that the FTX exchange’s native FTT token sold as an investment contract was a “security.” In its complaint to the court, the SEC stated:

“If demand for trading on the FTX platform increased, demand for the FTT token could increase, so that any increase in the price of FTT would benefit FTT holders equally and in direct proportion to their FTT holdings. The large allocation of tokens to FTX prompted the FTX management team to take steps to attract more users to the exchange platform and, as a result, increase the demand and exchange price of the FTT token. “

As a result, the SEC also charged Caroline Ellison and Gary Wang with securities fraud for offering FTTs as unregistered securities and for manipulating the price of FTTs. The SEC also characterized the FTT token as “illiquid crypto-asset“.

In addition, the securities regulator also mentioned the “buy and burn” from the SEC, adding that this initiative, along with several other exchange tokens, is similar to a stock buyback in which FTX earnings would buy and burn FTT, increasing its value.

SEC should ban crypto-currencies

Earlier this week, Sherrod Brown, chairman of the U.S. Senate Banking Committee, said that the SEC and CFTC should consider banning crypto-currencies. The U.S. Banking Committee has jurisdiction over all financial institutions in the United States. During an appearance on the show “Meet the Press” on NBC on December 18, Sherrod Brown stated:

“We want them to [la SEC et la CFTC] do what they need to do at the same time, maybe ban it, although banning it would be very difficult because it would go abroad, and who knows how that would work.”