• John Stark, former chief of the SEC office of internet enforcement, 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, the 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 host of the show raised the issue of due diligence and the lack thereof when it comes to investing in FTX. In response, John Stark pointed out that the public is not used to the business model of FTX and that investors should look for value and the long-term when it comes to investing.
He also noted that the state agencies have done a good job in clamping down on the industry and preventing frauds, citing the numerous cases they have won and the ICOs, lending programs and agreements for future tokens that they have stopped. He also criticized the lack of due diligence displayed by Sam Bankman-Fried, the CEO of FTX, saying that Bankman-Fried’s approach of “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” is the wrong way to invest.
John Stark also noted that the state agencies should be ashamed that customers have lost their money with no claims on anything coming out of the bankruptcy. He concluded his remarks by saying that investors should be much more careful when it comes to investing in the crypto space.
Overall, John Stark’s comments on the collapse of FTX highlighted the need for investors to be more diligent when it comes to investing in the cryptocurrency space. He also noted the important role that state agencies have played in clamping down on frauds and protecting investors from losses. Investors should take his advice to heart and always do their due diligence before investing in any cryptocurrency.