Former SEC executive warns: “Get out of crypto platforms now!”

The legal battle initiated by the SEC against Coinbase and Binance is significantly harming the crypto industry. Some experts believe that it exacerbates the already existing risks in this sector, to the detriment of users who now have to think about protecting their interests.

John Reed Stark urges immediate departure from exchanges

Just when the crypto industry was already experiencing significant turbulence, the SEC decided to add fuel to the fire. By consecutively targeting Binance and Coinbase, two of the largest exchanges in the market, they have sent a very serious warning to users.

For John Reed Stark, a former SEC executive, this is a clear message that users should take seriously. The warning is significant enough for them to consider leaving these platforms to safeguard their assets. This is the call he is making to them.

The former SEC collaborator explained the motivations behind this urgent appeal. “No matter what the carnival barkers promise, it is axiomatic that crypto trading platforms are high-risk, perilous and inherently unsafe. Crypto trading platforms are under a U.S. regulatory/law enforcement siege which has only just begun,” said John Reed Stark.

According to him, the reason behind this situation is that crypto companies are not registered with the SEC, which exempts them from complying with any standards. Consequently, users are exposed to all the inherent failures of the crypto industry.

As a result, platform customers are not protected. They could potentially face negative behaviors from industry participants, such as market manipulation or insider trading. This risk is further heightened by the lack of systemic safeguards to protect users from cybersecurity threats, among others.

It appears that many users did not wait for John Reed Stark’s call to seek shelter. According to data from the blockchain analytics company The Block Research, exchanges experienced a negative performance in May. The transaction volume of these platforms decreased by 23.2% during the period, reaching $307.4 billion. This is the lowest level since November 2020.