{"id":555291,"date":"2023-02-23T00:58:31","date_gmt":"2023-02-22T21:58:31","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/"},"modified":"2023-02-23T00:58:31","modified_gmt":"2023-02-22T21:58:31","slug":"gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/","title":{"rendered":"# Gary Gensler\u2019s SEC is playing a game, but not the one you think"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f763c2d13a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f763c2d13a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/#%E2%80%9D_Gary_Genslers_SEC_is_playing_a_game_but_not_the_one_you_think_%E2%80%9C\" >&#8221; Gary Gensler\u2019s SEC is playing a game, but not the one you think &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/#The_delay_tactic_A_tried_and_tested_legal_technique\" >The delay tactic: A tried and tested legal technique<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/#Gensler_is_a_master_magician_and_hes_using_misdirection_to_distract_us\" >Gensler is a master magician, and he\u2019s using misdirection to distract us<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/#Were_not_in_the_Matrix_%E2%80%94_were_in_a_selective_attention_experiment\" >We\u2019re not in the Matrix \u2014 we\u2019re in a selective attention experiment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/gary-genslers-sec-is-playing-a-game-but-not-the-one-you-think\/#Is_the_SEC_overcompensating_or_is_it_something_more_sinister\" >Is the SEC overcompensating, or is it something more sinister?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Gary_Genslers_SEC_is_playing_a_game_but_not_the_one_you_think_%E2%80%9C\"><\/span>&#8221; Gary Gensler\u2019s SEC is playing a game, but not the one you think &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDEvNzM3MDc2MjYtNzg5OS00NmE2LTg2MWMtODQyMGE3OGZjYTZmLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-48054ca8>On Feb. 13, a federal judge put the Securities and Exchange Commission and the Commodity Futures Trading Commission cases against former FTX CEO Sam Bankman-Fried on hold. You\u2019ll be forgiven if you missed this story \u2014 headlines and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social media<\/a> were dominated by the breaking <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that the SEC was suing crypto firm Paxos for minting Binance\u2019s stablecoin, Binance USD (BUSD).<\/p>\n<p>But we\u2019re not here to debate whether stablecoins are securities. The Howey test has been discussed to death, and while it\u2019s true that few people expect to profit from a token pegged to a fiat currency, the issue is more nuanced than the debate typically suggests.<\/p>\n<p>The issue is that the Paxos story broke on the same day as United States District Judge Kevin Castel delayed Bankman-Fried\u2019s case. And the ensuing stablecoin debate detracted from that very significant change, distracting many from what should have been the bigger story.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_delay_tactic_A_tried_and_tested_legal_technique\"><\/span>The delay tactic: A tried and tested legal technique<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Judge Castel granted a Justice Department motion to stay the FTX lawsuits filed by the SEC and the CFTC. Unsurprisingly, Bankman-Fried consented to putting the civil cases on hold. <\/p>\n<p>Since pleading not guilty to defrauding billions of dollars from his collapsed exchange and paying a $250 million bond, Bankman-Fried has been living at his parent\u2019s Palo Alto mansion in California. He\u2019s free to soak up the sun by the pool and play all the League of Legends he wants while millions of FTX customers who lost billions of dollars are left waiting for justice and reparations.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Expect the SEC to use its Kraken playbook against staking protocols<\/em><\/strong><\/p>\n<p>You might claim that the timing of these two stories \u2014 the Paxos BUSD lawsuit and the staying of Bankman-Fried\u2019s cases \u2014 is a simple coincidence. And even prosecutors argued that delaying these lawsuits made sense due to the considerable amount of overlap between them. But it feels very convenient for both Bankman-Fried and SEC Chair Gary Gensler. <\/p>\n<p>Delay tactics are nothing new in court cases. Putting time and distance between the defendant and the crime itself is a well-established strategy. And let\u2019s not forget: It took two months just for Bankman-Fried to be extradited from the Bahamas and formally charged on U.S. soil.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Gensler_is_a_master_magician_and_hes_using_misdirection_to_distract_us\"><\/span>Gensler is a master magician, and he\u2019s using misdirection to distract us<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Unfortunately, the real story here is far more insidious. On Feb. 9, it was announced that Kraken would not only have to shut down its crypto staking service in the U.S. but also pay a fine of $30 million in its settlement with the SEC. Naturally, the internet was on fire with the news and its ramifications for American crypto consumers.<\/p>\n<p>Coinbase founder and CEO Brian Armstrong announced that his company would fight back, tweeting on Feb. 12 that \u201cCoinbase\u2019s staking services are not securities. We will h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ily defend this in court if needed.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Coinbase&#8217;s staking services are not securities. We will happily defend this in court if needed.<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/GtTOz77YV3\">https:\/\/t.co\/GtTOz77YV3<\/a><\/p>\n<p>\u2014 Brian Armstrong (@brian_armstrong) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/brian_armstrong\/status\/1624829368915890176?ref_src=twsrc%5Etfw\">February 12, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Encouraging words. But it\u2019s all just a distraction. Gensler is a magician, and his crypto crackdown taking place under the guise of investor protection is the misdirection part of the trick.<\/p>\n<p>\u201cToday\u2019s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection,\u201d Gensler <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/press-release\/2023-25\">said<\/a>.<\/p>\n<p>It\u2019s not about investor protection. It\u2019s about keeping the public\u2019s and the media\u2019s eyes on the \u201ccryptocurrency as securities\u201d story while Gensler dupes us into forgetting that he met with Bankman-Fried in the months leading up to the FTX catastrophe \u2014 yet failed to prevent it. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Were_not_in_the_Matrix_%E2%80%94_were_in_a_selective_attention_experiment\"><\/span>We\u2019re not in the Matrix \u2014 we\u2019re in a selective attention experiment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In 1999, research psychologist Christopher Chabris and cognitive scientist Daniel Simons asked a group of people to watch a video and count the number of times the players wearing white shirts passed a ball. What the viewers often failed to notice was a person in a gorilla suit who walked right through the circle of players. <\/p>\n<p>It\u2019s been reported, but little investigated, that Gensler met with Bankman-Fried prior to the FTX collapse. In March 2022, the SEC chair had a 45-minute Zoom call \u2014 which was characterized as \u201cunusual\u201d \u2014 where they discussed, among other things, a new trading platform.<\/p>\n<p>So, fraud and money laundering on a huge scale occurred not just on Gensler\u2019s watch but right under his nose. And right now, he should be under an incredible amount of scrutiny, explaining how he missed the impending implosion of FTX, wire fraud, campaign finance violations and conspiracy to commit money laundering that Bankman-Fried has since been charged with.<\/p>\n<p>Congress should be asking Gensler some tough questions over his failure to prevent such a catastrophe despite his links to Bankman-Fried. But the spotlight isn\u2019t on this element of the story. Gensler and the SEC are working diligently to keep the spotlight on anything but that. Kraken\u2019s staking services. Paxos\u2019 BUSD stablecoin. And the latest? Do Kwon. <\/p>\n<p>The SEC has suddenly found time to charge the Terraform Labs founder with \u201corchestrating a multi-billion dollar crypto asset securities fraud.\u201d But Terra Luna and the TerraUSD token crashed in May 2022. So, why is it finally filing these charges now?<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The SEC shook Kraken down for $30M, but it doesn&#8217;t mean they had a case<\/em><\/strong><\/p>\n<p>\u201cWe allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and Terra USD,\u201d Gensler said in a statement.\u00a0\u201cWe also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.\u201d<\/p>\n<p>It\u2019s estimated that the Terra implosion cost investors over $40 billion. But that was almost a year ago. And FTX investors lost approximately $10 billion. So, it\u2019s safe to say that the SEC isn\u2019t great at protecting investors.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_the_SEC_overcompensating_or_is_it_something_more_sinister\"><\/span>Is the SEC overcompensating, or is it something more sinister?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>At best, this recent round of regulatory \u201ccrackdowns\u201d is a product of the SEC overcompensating for its past failures, which go much further back than just FTX and Terra. At worst, they\u2019re an attempt by Gensler to distract us from the fact that he\u2019s either corrupt or inept \u2014 and hoping we forget that he met with Bankman-Fried in 2022.<\/p>\n<p>What we need to remember is that Kwon is still free. So is Bankman-Fried. Yet, millions of retail investors had their life savings wiped out. Where was Sheriff Gensler then?<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Zac Colbert <\/strong>is the head of content at Cryptology and an official content creator for Binance Feed. He graduated with a degree in digital media from Brighton University in the United Kingdom.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article is for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/gary-gensler-s-sec-is-playing-a-game-but-not-the-one-you-think\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Gary Gensler\u2019s SEC is playing a game, but not the one you think &#8220; On Feb. 13, a federal judge put the Securities and Exchange Commission and the Commodity Futures Trading Commission cases against former FTX CEO Sam Bankman-Fried on hold. You\u2019ll be forgiven if you missed this story \u2014 headlines and social media&#8230;<\/p>\n","protected":false},"author":1,"featured_media":555292,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/73707626-7899-46a6-861c-8420a78fca6f.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74858,74898,75269,71511,55229,70934,67874,8575],"class_list":["post-555291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin-regulation","tag-sec","tag-us-government","tag-government","tag-law","tag-regulation","tag-united-states","tag-usa"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/555291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=555291"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/555291\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/555292"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=555291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=555291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=555291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}