Comment Text:
This concerns the operation of vertical business systems within the crypto space, encompassing market makers, brokers, exchanges, and clearinghouses. There were instances where regulatory oversight almost allowed entities like FTX to circumvent established laws, granting them significant control over the market, a situation that nearly coincided with their subsequent collapse. Similar practices were also identified in the actions of Binance and Coinbase. These occurrences highlight the potential triggers for market crashes and underscore significant conflicts of interest, particularly detrimental to retail investors. Such conduct is unlawful and recognized by the financial industry, evident in their attempts to manipulate the system using compromised entities.
The regulatory body should thoroughly assess the risks posed by conflicts of interest, flaws within the clearing systems, excessive market concentration, contagion risks, threats to financial stability, and other potential hazards. An essential aspect to consider is the erosion of market confidence due to perceptions of preferential treatment. The functioning of markets relies heavily on maintaining this confidence.
I implore fellow investors to engage in active discourse regarding these concerns. The collapse resulting from FTX's foray into tokenized stocks prompted the establishment of GMAC (akin to a heightened FTX), and it appears history is repeating itself. We must not remain passive observers as these individuals at the CFTC, exemplified by figures like Pham, enable the likes of GMAC to manipulate the market anew. The involvement of entities such as Citadel and BlackRock further deepens the issue, characterizing them as the architects of this dubious endeavor. Their intention to exploit the system with their reckless behavior demands a response.
Retail investors, who constitute the backbone of the market, cannot tolerate such blatant conflicts of interest, risks endangering the stability of our markets, and the audacious endeavor to legitimize criminal actions. The crypto sphere witnessed the exposure of these ill-intentioned actors, and now they seek to subvert the system for their gain. We stand united against this violation, resolute in our refusal to allow this travesty to persist.
