• 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.
• The host raised the issue of due diligence, more specifically the lack thereof where investments in FTX were concerned.
• 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 joined CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX. The show’s host raised the issue of due diligence, or the lack thereof when it comes to investments in FTX. Stark expressed his agreement with the host’s sentiments, noting that the business model FTX was based on wasn’t something the public was familiar with.
He went on to explain that investors tend to look for value and the long-term when they invest, not the product or service in question. He then questioned which agency should be held accountable and ashamed for a situation where customers have lost their money and have no claims on anything coming out of bankruptcy.
Stark defended the state agencies in this case, pointing out the work they’ve done in the past to stop ICOs, lending programs, and agreements for future tokens. He also noted that Dinner meetings between Bankman-Fried and government officials were “bad judgment” and that investors should take a more diligent approach when investing in crypto.
In conclusion, Stark urged investors to take a more methodical approach when it comes to investing in crypto. He noted the importance of doing research into the product or service in question, as well as the team and the project’s long-term goals. He also warned investors to be wary of any company that fails to provide adequate due diligence and to always be aware of the risk involved.