FTX requested SEC exemption but was denied

SEC document indicates FTX and former CEO Sam Bankman-Fried discussed a no-action letter. According to the SEC’s online archive of no-action letters and a statement to The Block, the agency did not issue one.

The SEC and other authorities may commit not to pursue enforcement proceedings over certain operations if they don’t break current laws and meet other requirements.

The request occurred at a March 23 meeting, according to an SEC filing. IEX spokesperson: “We talked with [the SEC] to understand their regulatory framework for digital asset securities.” “We’ve never asked for preferential treatment, nor has the SEC.” “Because of the discussion, a memo was attached to the comment file,” an SEC representative told The Block.

In 2020, the SEC published a no-action letter for broker-dealers running digital asset trading platforms, outlining parameters under which staff would not propose enforcement action.

Crypto supporters and SEC critics attended the FTX conference. Rep. Tom Emmer, R-Minn., accused Gensler of using “legal loopholes to gain a regulatory monopoly”. Rep. Warren Davidson, R-Ohio, condemned the SEC’s “selective enforcement.”

Tyler Gellasch, who worked for former SEC Commissioner Kara Stein, minimized the encounter. “Nothing about a no-action letter request is unusual,” he stated.

Gensler opposed Bankman-bill Fried’s granting the CFTC additional control over digital asset rules and monitoring. Decentralized finance advocates suspect the measure Favours centralized exchanges. 

The law seeks to implement the recommendations of financial regulators and Treasury Secretary Janet Yellen, who have called for stricter rules surrounding digital assets that qualify as commodities, such as bitcoin, and for more direct regulatory authority over exchanges that facilitate trading in such assets.

Also Read: BlockFi Has ‘Significant Exposure’ To FTX, But Denies About Most Assets Are At FTX

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