News View Non-AMP

Ex-SEC Lawyer Raises Red Flag, Urges Crypto Investors To Exit Markets! Here’s Why.

Published by
Qadir AK

Binance, one of the largest cryptocurrency exchanges in the world, has halted withdrawals citing network congestion. This news comes on the heels of an unconfirmed report that the halt occurred right after $3.3 billion bitcoin in aggregated account withdrawals from multiple exchanges. This was addressed in a tweet by John Reed, Former Chief, of the SEC Office of Internet Enforcement.

Lack of Regulatory oversight is a bigger problem

Reed pointed out that the current crypto industry is highly unregulated. Binance is not registered with the SEC, which means that there is no US oversight, audits, inspections, net capital requirements, licensure, or insurance.

If Binance was SEC or FDIC registered, a US team of auditors would be on site and in Binance’s face, demanding to speak to everyone, demanding documents, demanding trading information, and immediately investigating, and referring any suspicious conduct to the US DOJ. But as the crypto industry is highly unregulated, this is unlikely to happen, which makes the investors insecure. 

Lack Of Consumer Protection

The broader issue in the crypto-ecosystem is that there is a lack of consumer and investor protections. When a halt or suspension occurs, customers are left holding their breath and praying. Victims of crypto-collapses become unsecured creditors, likely left with nothing.

When a halt, suspension, etc. occurs, customers just hold their breath and pray. Consider all of the victims from the collapses of FTX, Celsius, BlockFi, Voyager, Terra and all the rest — who lost everything after a “halt.”

Should You Exit The Markets?

The risks associated with the lack of regulatory oversight are never justified under any circumstance, according to Reed. He urges all Binance and other crypto platform customers to get out now.

What the crypto industry lacks is no industry oversight, licensure, insurance, etc. This can become scary when a ‘withdrawal halt’ like this happens. Moreover, this is a nightmare for regulators who are worried about fraud, money laundering, and other criminal activities. 

The question remains: how long can the crypto-ecosystem continue to operate without proper regulation and oversight? As the industry grows and matures, the need for regulatory clarity and protections for consumers and investors will become increasingly urgent.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

Bitcoin Rich List: Who’s Stacking, Who’s Slacking?

In recent months, many major companies around the world have started buying large amounts of…

June 1, 2025

XRP Price Prediction for 2040: Will It Be Enough to Quit Your 9-to-5?

Many crypto investors dream about the day their favorite coin takes off — and for…

June 1, 2025

This Hot New Altcoin In DeFi Is Turning Heads

As the month of May draws to a close, investors are searching for the best…

June 1, 2025

Best Crypto Coins to Watch This Week and Buy

This week’s crypto spotlight shines brightly on a select group of coins capturing investor interest…

June 1, 2025

Missed Bitcoin at $1? Bitcoin Solaris at $5 Is the Closest You’ll Get to a Real Second Shot

Most investors who passed on Bitcoin early didn’t lack belief — they lacked access, context,…

June 1, 2025

MOONPIG Price Crashes 65% & Kaspa Holds as Punisher Coin See Whale Action: Is this the Next 1000x Pump?

Is meme coin season peaking, or just getting smarter? Right now, Kaspa (KAS) market sentiment…

June 1, 2025