• John Stark, a former chief of the SEC office of internet enforcement and president of John Reed Stark Consulting, joined CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX.
• Stark raised concerns over the lack of due diligence when investing in FTX and quoted Sam Bankman-Fried’s statement that “we don’t look at the product, service, etc…we look at whether this is an idea we can pitch to someone. If we think this is something we can sell, then we’re all in.”
• Stark defended the state agencies, pointing out that they had won many cases, such as stopping ICOs, lending programs, agreements for future tokens, and other similar initiatives.

John Stark, a former chief of the SEC office of internet enforcement and president of John Reed Stark Consulting, recently joined CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX. The host raised the issue of due diligence, more specifically the lack thereof where investments in FTX were concerned. He asked Stark what can be done about that.

John Stark responded by quoting Sam Bankman-Fried himself: We don’t look at the product, service, etc…we look at whether this is an idea we can pitch to someone. If we think this is something we can sell, then we’re all in. Due diligence is absurd. It’s just the wrong way to invest. When you invest, you should look for value, you should look for the long-term. The (FTX) business model is something the public isn’t used to…

Stark agreed that the model was different and that it was absurd, but he also pointed out that investors were much like everyone else and that it was up to the state agencies to be more proactive. He stated that the agencies had won many cases, such as stopping ICOs, lending programs, agreements for future tokens, and other similar initiatives.

Stark then went on to express his concern over the lack of due diligence when investing in FTX, and the fact that customers had lost their money and had no claims on anything coming out of bankruptcy. He concluded his remarks by advising investors to look for value and the long term when investing, and that due diligence should be a priority.

Overall, Stark’s comments reveal the importance of proper due diligence when investing, and the need for investors to be more aware of the risks associated with investing in new and emerging technologies. This is especially true in the crypto space, where the risks can be far greater than traditional investments. As such, it is essential that investors take the time to research and understand the products and services they are investing in, and to be aware of the potential pitfalls that could arise from their investments.