According to a report by the Washington Examiner, General Counsel of the US securities and exchange commission (SEC) Dan Berkovitz announced that he would quit his role on the 31st of January.
The report cites that the resignation announcement rolled after discovering that the government official had previously “wined and dined” with FTX founder Sam Bankman-Fried and his lobbyists.
Berkovitz previously served as the Commodity Futures Trading Commission (CFTC) commissioner. “After thirty-four years of public service, it is time for me to pursue new and different challenges and opportunities,” Berkovitz said. His announcement came the same day that SBF was released for a bail of $250 million.
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SEC’s involvement in FTX crash
Several emails acquired by the watchdog Protect the Public Trust revealed that Berkovitz maintained a cordial relationship with Sam Bankman-Fried and FTX. In the report, Dan Berkovitz, Sam Bankman-Fried, FTX General Counsel Ryne Miller, and FTX Brett Harrison met in an opulent restaurant in October 2021.
“If ever there was a scene to conjure up a vision of a D.C rigged toward corrupt insiders at the expense of the little guy, it would be difficult to top this one,” Michael Chamberlain, director of Protect the Public’s Trust, said.
“Not long before its demise and a slew of fraud charges, SBF and his gang were doubtlessly courting one of their would-be regulators to try to manipulate the regulations to their advantage,” he added.
Republican Senator Tom Emmer also stated that SEC and FTX had quite a good number of meetings. In response to SEC chair Gary Gensler’s statement about deploying every means at his call to enhance compliance, Michael Chamberlain stated, “Making backroom regulatory deals with bad actors is not a tool in the SEC’s toolbox.”
Read Also: Sam Bankman-Fried arrives in the US to stand trial
“While the collapse of FTX and the behavior of its executives have certainly made a lot of news,” Chamberlain continued, “the actions of federal officials should also be under scrutiny.”
Gary Gensler also met with SBF some months before FTX’s meltdown. During the meeting, they allegedly rubbed their minds about a new SEC-approved crypto trading platform. If approved, this would have given SBF and his firms a higher competitive edge than the other crypto firms in the industry.
At the start of this month, Ritchie Torres— Democratic Rep— heaped blame on Gensler for the FTX crash. “When it comes to FTX, Chair Gensler fundamentally failed as a regulator, and he bears sole responsibility,” he stated at the time. The deception is more profound than what is obtained from a surface level. In a revelation by BeInCrypto, anti-crypto Senator Elizabeth Warren also had familial bonds with the Bankman-Fried family.
The Implication of Federal officials’ cordial relationships with crypto exchanges founders
Keeping a cordial relationship with crypto exchange founders as federal officials jeopardize the credibility and objectivity of regulations approved to serve as a watchdog for the activities occurring within the cryptocurrency ecosystem. The market looks set to go through some instrumental and lifetime transitioning to ensure that crypto investors and traders remain loyal and optimistic about the proceedings of the space.
Thus, to enhance this, federal characters who occupy pivotal roles in enacting these regulations set to steady the foot of crypto investors in the space should condemn every friendly relationship with crypto exchange founders to avoid suspicion and doubt. The market’s future is at stake if federal officials do not desist from keeping cozy relationships with crypto exchange founders. However, if caught, such persons should immediately leave offices.
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