John Reed Stark, former head of the US Department of Law Enforcement Securities and Exchange Commission (SEC), warns investors to avoid assets Cryptocurrency exchange to capture.

blatant chirp Cryptocurrency exchanges are in the early stages of a regulatory and law enforcement onslaught from the United States. During uncertainty, the former SEC employee recommends withdrawing assets from the platforms. BinanceUS and Coinbase appear to be the first exchanges targeted by the government agency. Despite his past criticism of the SEC, Stark praised the regulator’s recent enforcement action on cryptocurrency:

My point is that the SEC is doing the right thing with its crypto-related enforcement efforts. Regardless of what others claim, it is clear that cryptocurrency exchanges are inherently risky, dangerous, and insecure.

Exchanges fall short

According to Stark, cryptocurrency exchanges are inherently risky and insecure, regardless of what the platform founders promise. He claims that there is a “gap” in the protection required for investors on these types of platforms. Due to a lack of regulation, exchanges fall short when it comes to record keeping, cyber security, codes of conduct, customer complaints, and transaction orders. Additional regulations in this regard are desirable.

Stark also argues that these platforms currently have no reason to comply with US laws and regulations prohibiting manipulation, insider trading, customer dealings, and other fraudulent behavior by customers or employees. He also believes that the SEC is currently unable to detect fraud on cryptocurrency exchanges. According to John, the new regulations will make this possible:

Everything is straight forward and common sense. The SEC filing lays out the critical requirements that protect investors from individual risks and protect capital markets from global systemic risks. The requirements also make the US market the safest, robust, dynamic and most sought-after market in the world.