Ex-SEC John Reed Stark Hits Back at Crypto After Ripple CLO’s Comments

Former U.S. SEC official John Reed Stark attacked crypto and offered his three admonitions to all the spot Bitcoin ETF sponsors, crypto exchanges, promoters, and other entities related to crypto. The move comes after the crypto community including Ripple CLO Stuart Alderoty, Nic Carter and others slammed SEC Enforcement Division Director Gurbir Grewal for criticizing crypto and non-compliance in the industry.

Former SEC Official John Reed Stark Reprimands Crypto

Former SEC Enforcement Chief John Reed Stark said “Crypto is Not a Pathway For Financial Inclusion or a Panacea For the Unbanked. That is a Mammoth Deception and Despicable Exploit.”

He slams both old crypto firms and new financial behemoths entering crypto for making hefty profits on fee income from their customers. He claims there is no advantage in crypto, saying the companies just “shill their deceitful and ruthless narrative on social media ad infinitum.”

John Reed Stark provided three admonitions to all the Bitcoin Spot ETF sponsors, crypto exchanges, promoters: These are:

1. Crypto doesn’t help the unbanked: He claims a Bitcoin Spot ETF or crypto exchange is not decentralized and doesn’t help the unbanked.
2. Decentralized finance somehow empowers investors: He said crypto-intermediaries are more centralized, less accountable, and less transparent than tradefi. Bitcoin Spot ETFs and crypto exchanges are not going to fix financial inclusion.
3. Crypto is fraud: Companies focus colossal profits from mathematical computational blather and not innovation.

He cited SEC Enforcement Director Gurbir Grewal’s speech regarding predatory inclusion tactics of certain crypto entities.

“The ‘predatory inclusion’ tactics that certain crypto entities are directing at Black, brown, and other marginalized communities are extremely troubling. Here, I’m talking about the familiar (but so far unsupported) narratives that crypto will increase financial inclusion; that it will uplift the unbanked or underbanked; and that it will help them build wealth and increase upward mobility.”

Also Read: Binance Still Bullish On These 3 Trending Crypto

Ripple CLO Stuart Alderoty Slams SEC’s Gurbir Grewal

Ripple chief legal officer Stuart Alderoty slammed SEC’s Gurbir Grewal for falsely claiming that SEC acted with integrity in enforcement actions against crypto companies. He highlights sanctions on the SEC for “gross abuse of power” in DEBT Box case, Ripple judge’s admonishment for lack of “faithful allegiance to the law” and the judge in Grayscale lawsuit filing the SEC “arbitrary and capricious”.

Alderoty also added that Gurbir Grewal cited SEC vs Ripple but failed to agree that the SEC lost on most of its claims in the case. The court even rejected the SEC’s argument that “XRP was in and of itself a security.”

He also commented on the lack of clear guidance from the SEC, but Grewal said the regulator has given clear crypto guidance. Ripple CLO said even SEC’s former General Counsel noted that the Howey test on the SEC’s website has “greater confusion.”

Also Read: Ripple Labs To Issue Stablecoin To Rival USDT and USDC