SEC Chairman: FTX, 3AC, and Terra are all the same; U.S. SEC and Department of Justice Investigate FTX Incident

SEC Chair Gary Gensler criticized, "People are hoping for a better future in the crypto market, but they won't have it."

The Wall Street Journal: SEC and Justice Department Investigating FTX

The Wall Street Journal reported that according to sources, the SEC and the U.S. Justice Department are in close contact and investigating the FTX incident.

The SEC is responsible for civil law related to investor protection, while the Justice Department handles criminal aspects such as fraud.

The SEC has already contacted lawyers for FTX, requesting more documents related to FTX.US and its parent company FTX, as well as more detailed information about FTX's relationship with Alameda Research.

SEC Chairman: SBF's Regulatory Proposal Has Undermined Securities Laws

SEC Chairman Gary Gensler attended an event hosted by the Healthy Markets Association on 11/9, where he mentioned his strong opposition to the U.S. DCCPA legislation supported by SBF, the founder of FTX:

I believe that some of the bills in Congress have undermined securities laws, especially those driven by someone who has messed up in recent days. You may wonder how this happened, because the legislation is too casual and hasty. The SEC will continue to do what we need to do.

The bill grants the CFTC greater authority over futures exchanges, and Gensler expressed his admiration for the CFTC, but he emphasized that the securities sector should still be overseen by the SEC.

Bankruptcy and Collapse Are Common in Cryptocurrency

Gensler stated:

We saw the FTX incident in the past two days, but if we take a step back, it has been the pattern for the past six to eight months. When we do not rely on time-tested policies, investors get hurt. The general investing public hopes for a better future in the crypto market, but they won't get it.

He stressed that he does not distinguish between the FTX incident and events involving Celsius Network, Terra, and 3AC, as to him, they are all the same:

Excessive leverage, lack of public disclosure, transparency, etc., we have seen them trading with user funds.

Majority of FTX Legal Team Resigns

Unconfirmed reports from Semafor cite sources indicating that the majority of FTX's legal and compliance teams resigned on 11/8, leaving almost no senior executives able to address the specific turmoil at FTX.

Semafor also stated that SBF is one of their investors.