FTX’s Brett Harrison unpacks how regulatory uncertainty holds back the crypto industry

Back in July, the SEC launched an investigation into Coinbase for allegedly listing several tokens that should have been listed as securities.  Yesterday, SEC Chair Gary Gensler made comments that indicate he believes more crypto exchanges and broker-dealers are still in violation of guidelines put in place under former SEC Chair Clayton in 2017. In this episode of The Scoop, FTX President Brett Harrison shares how FTX US is striving to avoid regulatory issues, and why regulatory clarity in the digital asset space will lead to more domestic innovation in the US.  According to Harrison, the onus of “deciding what to list is on the exchange.. but that doesn't necessarily prevent future enforcement if the regulatory agency in this case disagrees.” Given this dynamic, FTX US lists a limited number of tokens out of an abundance of caution. As Harrison explains: “We have fewer than 30 tokens on our exchange, and we think that's fortunately or unfortunately the long term play that will work for us until there is better clarity in terms of what registration is going to be required.” Although FTX US is not currently listing a broader selection of tokens, Harrison does believe many crypto projects would gladly register with the SEC if a clear framework existed: “I think a lot of token projects would register and quite happily do so if there was a clear process for it, because they want to get listed on US exchanges, they want to be able to operate their company in the US without worrying about enforcement action down the road — they would like for their tokens to have security like properties.” Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. Episode 87 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro and FTX President Brett Harrison. Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com. This episode is brought to you by our sponsors Tron, Chainalysis & IWC Schaffhausen About Tron On August 1st, 2022, Poloniex launched a faster and more stable trading system along with a brand new user interface. Poloniex was founded in January 2014 as a global cryptocurrency trading platform. With its world-class service and security, it received funding in 2019 from renowned investors, including H.E. Justin Sun, Founder of TRON. Poloniex supports spot and margin trading as well as leveraged tokens. Its services are available to users in nearly 100 countries and regions with various languages available. For more information visit Poloniex.com. About Chainalysis Chainalysis is the leading blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com. About IWC Schaffhausen IWC Schaffhausen is a Swiss luxury watch manufacturer based in Schaffhausen, Switzerland. Known for its unique engineering approach to watchmaking, IWC combines the best of human craftsmanship and creativity with cutting-edge technology and processes. With collections like the Portugieser and the Pilot’s Watches, the brand covers the whole spectrum from elegant timepieces to sports watches. For more information, visit IWC.com.