Coin An: A Shadow Bank Waiting to Collapse

03/07/2023 00:53 • Daily Digest • 71 views

According to the news on March 7, in response to the questions from three US senators, John Reed Stark, a former Internet enforcement officer of the United States Securities and Exchange Commission, wrote on Twitter: “My view is that Coin An is a shadow bank. While providing limit order/brokerage/custody/clearing/settlement/other services, it mints its own counterfeit currency without the supervision or audit of the United States. This is the recurrence of FTX, and a large-scale bank run seems inevitable. Once the withdrawal is suspended, Coin An begins to collapse. Not only will Coin An’s customers be cut off, but also customers may become unsecured creditors. See FTX, Celsius, Block Fi, Voyager, a devastating investor massacre. “

Former official of the US SEC: Coin An is a shadow bank, and large-scale bank runs seem inevitable

Interpretation of the news:

The news on March 7 revealed that a former internet enforcement officer of the United States Securities and Exchange Commission (SEC), John Reed Stark, labeled Coin An as a ‘shadow bank’. According to Stark, the company “provides limit order/brokerage/custody/clearing/settlement/other services” but mints its own “counterfeit currency” without “supervision or audit” from the United States. As a result, a large-scale bank run is inevitable, and once withdrawals are suspended, the company is likely to collapse, leaving its customers stranded and possibly becoming unsecured creditors.

Stark’s interpretation of Coin An’s activities aligns with the general concern among cryptocurrency investors regarding the lack of regulatory oversight in the industry. The absence of traditional regulatory frameworks leaves investors in a vulnerable position, as they are entirely dependent on the integrity of the companies that provide cryptocurrency services.

From this perspective, it is understandable why Stark is critical of Coin An’s activities. The company is providing financial services but is also creating its own currency without a regulatory framework to monitor its activities. This is problematic because an unregulated financial company is more likely to engage in fraudulent activities or engage in risky business practices that could have severe consequences for its customers.

Stark’s mention of FTX, Celsius, Block Fi, Voyager, along with Coin An as “a devastating investor massacre” raises the concern that other companies in the industry may also follow in the footsteps of Coin An. This statement also highlights the need for better regulation in the industry to protect investors from unscrupulous businesses.

In conclusion, Stark’s interpretation of Coin An paints a grim picture of the state of cryptocurrency services. It highlights the risks associated with investing in unregulated digital currency and calls for a more robust regulatory framework that could protect the interests of investors. The labeling of Coin An as a shadow bank is instructive, as it draws attention to an organization that is engaged in providing financial services without proper regulation, thereby exposing its customers to undue risk.

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Coin An: A Shadow Bank Waiting to Collapse

Former official of the US SEC: Coin An is a shadow bank, and large-scale bank runs seem inevitable

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