• John Stark, a former chief of the SEC office of internet enforcement and president of John Reed Stark Consulting, joined CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX.
• He addressed the issue of lack of due diligence when it comes to investments in FTX.
• Stark defended the state agencies, pointing out they’ve won many cases; they stopped ICOs, lending programs, agreements for future tokens.
John Stark, a former chief of the SEC office of internet enforcement and president of John Reed Stark Consulting, recently appeared on CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX. The host raised the issue of due diligence, more specifically the lack thereof where investments in FTX were concerned. He asked Stark what can be done about that.
John Stark responded by quoting Sam Bankman-Fried himself: “We don’t look at the product, service, etc…we look at whether this is an idea we can pitch to someone. If we think this is something we can sell, then we’re all in. Due diligence is absurd. It’s just the wrong way to invest. When you invest, you should look for value, you should look for the long-term. The (FTX) business model is something the public isn’t used to…”
Stark then went on to agree that the model is different and absurd, but that investors should not be blamed for the situation. He asked which agency should be ashamed that people have lost their money and have no claims on anything coming out of bankruptcy. Stark defended the state agencies in response, pointing out they’ve won many cases; they stopped ICOs, lending programs, agreements for future tokens as well as dinner meetings between Bankman-Fried and government officials, which he labeled as “bad judgment”.
The SEC office of internet enforcement has been very active in recent years, clamping down on fraudulent activity. They have also worked with other agencies to ensure that investors are not taken advantage of and that their funds are safe. This has been a major focus for the SEC, and it is clear that they are putting a lot of effort into making sure that the crypto market is a safe place for investors.
In conclusion, John Stark’s appearance on CNBC’s ‚Squawk Box‘ provided valuable insight into the collapse of FTX, as well as the current state of the crypto market. Stark’s words of caution and advice were clear, and it is important to remember that due diligence is essential when investing in any asset. The SEC office of internet enforcement has done a great job of protecting investors and ensuring that their funds are safe, and it is up to the public to use their own best judgment when investing in any asset.