Former Securities and Exchange Commission (SEC) employee John Reed Stark recently expressed his confusion over the U.S. Department of Justice’s (DOJ) ostensible inaction in crypto-related cases, particularly regarding the parents of an entity known as SBF.
Despite the many enforcement actions the SEC has taken, Stark, who has over two decades of experience in the SEC Division of Enforcement, has seen what he calls a “extraordinary dearth” of U.S. DOJ charges involving cryptocurrencies.
Stark’s main concerns
Stark specifically expressed his concerns regarding the U.S. DOJ and SEC’s failure to name SBF’s parents as defendants, highlighting the contrast between the abundance of SEC enforcement actions and the dearth of concurrent criminal investigations and prosecutions by the DOJ in the cryptocurrency space.
Stark pointed out that Tyler Winklevoss, the CEO of Gemini, had called such accusations “super lame” and compared them to “manufactured parking tickets.” Coinbase and Binance, on the other hand, regard their fees as “badges of honour,” according to Stark.
The SEC can only apply so much constraint because it is largely a civil enforcement body, according to the former SEC employee. Without the overhanging threat of DOJ legal action, companies would continue to see the SEC’s regulatory intrusions as nothing more than ordinary operating expenses.
Potential fraud charges against Binance
The DOJ is reportedly considering filing fraud charges against Binance, the biggest cryptocurrency exchange in the world, according to a Semafor report. Federal prosecutors are considering other alternatives like penalties or non-prosecution agreements, but they are mindful of the potential consequences, such as market volatility and consumer damage, that would come from a prospective indictment.
As a result of this restructure, the National Cryptocurrency Enforcement Team (NCET) of the Justice Department will be better equipped to manage the growing number of cryptocurrency-related investigations. With this change, NCET will become a permanent section inside the department’s criminal division, concentrating on offences using computers.
