In one of the strongest regulatory smackdowns in Web3 to date, U.S. Securities & Exchanges Commission (SEC) Chair Gary Gensler accused two of the biggest exchanges, Binance BNB/USD and Coinbase Global Inc COIN, of violating securities rules and engaging in deceptive practices.
The SEC brought 13 charges against Binance and its founder Changpeng “CZ” Zhao and accused Coinbase of profiting “billions of dollars unlawfully facilitating the buying and selling of crypto asset securities.”
Gensler said in a press release, “Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied… The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.”
In an exclusive interview, Benzinga spoke with Kevin O’Leary, chairman of O’Leary Ventures and Beanstox, and strategic investor and spokesperson for WonderFi. Also known as"Mr. Wonderful," O’Leary is a prominent entrepreneur, investor and television personality who has followed the rise of crypto with interest.
O’Leary was a keynote speaker for Benzinga’s 2022 Future of Crypto event, where he discussed the FTX FTT/USD collapse with Anthony Scaramucci.
Read Also: Coinbase CEO Knew Court Battle Was Coming, Met With SEC Several Times But 'Just Got Silence'
Benzinga wanted to follow up with O’Leary to see how that "FUD event" compares to the twin woes of Binance and Coinbase.
O’Leary was confident that this is a step forward for crypto, though not necessarily for Binance and Coinbase.
“I actually think the entire industry is turning a page in a positive way. If you think about crypto over the last three years, we've kind of been stuck in the mud. And that’s because there has been absolutely no institutional interest in this asset,” he said.
O’Leary maintained there are bad operators at all levels of the crypto industry who are inhibiting growth because the uncertainty an unregulated industry creates keeps away big investors.
“It's fraught with rogue operators not interested in playing by the rules. And they've gotten away with it for a long time. You can't make more money than an unregulated exchange, there's no rules, you can issue tokens for any price you wish," he said. "You can trade them back to fiat currencies of any country you wish. And nobody stops you from doing it. But that will not be the future. ”
When asked if the crypto industry could consider itself unfairly treated, O’Leary dismissed the idea, saying the industry is going through a rebirth.
“This is the rebirth of an industry and a changing of the guard. I don't think CZ or any of the crypto cowboys will be around in three years. They'll be replaced by financial professionals that will be operating all of this great new technology in a regulated and compliant fashion, far less profitably, but sustainably,” O'Leary said.
O’Leary believed there will be no meaningful challenge to the SEC at this point. The outcome is a foregone conclusion — crypto will have to take on a new mainstream regulated form.
“The SEC has unlimited resources. They're not going to stop. Sorry about it, get over it, turn the page, let's move on. Because there's so much potential — I would love to invest in crypto 2.0,” he noted.
O’Leary remained bullish on crypto and blockchain technology overall and called on those in the crypto space to remain optimistic based on the strength of the technology, even as the cast of established players changes.
“Think of the 'Gensler spatula' coming out of the sky, and scraping all the crap out of the crypto market. Brighter days are ahead, sacrifice a few pioneers. It's not like you can't say you didn't see it coming,” O'Leary said.
The Future of Crypto: O’Leary has placed his bets on a more stable future for crypto, and can perhaps look at U.S. regulatory wrangling from a secure position, having aligned his goals with WonderFi, a Canadian-based blockchain company.
WonderFi offers “unified access to digital assets” through its two popular Canadian-owned and operated, fully registered, and regulated crypto trading platforms, Bitbuy and Coinberry, and has near-term plans for new partnerships and expansion.
In written comments, Dean Skurka, interim CEO of WonderfFi, said: “While acknowledging the importance of regulation to protect consumers and to allow the industry to mature, we recognize that associated costs can be significant... WonderFi plans to merge with registered crypto-trading platforms Coinsquare and CoinSmart, while looking to diversify our product offerings to include equities trading and iGaming.”
Read Next: Congress Members Call On Treasury Department, IRS To Ink Rules For Taxing Crypto
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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