Brad Katsuyama, Chair of IEX, told that he and his staff are in talks with Coinbase to launch the new venture following recent meetings with officials from the Securities and Exchange Commission (SEC) that centered on gaining SEC Chair Gary Gensler’s approval for such an exchange.
Katsuyama, who is best-known for being the protagonist in the book Flash Boys, previously partnered with former FTX CEO Sam Bankman-Fried (SBF) to launch the new exchange, but that relationship fractured amid the collapse of FTX and the filing of criminal and civil charges against SBF.
The hope is said to be to create an exchange with regulatory approval, including from the likes of the SEC — whose chair, Gary Gensler, has been accused of pursuing crypto regulation by enforcement. Last week, Terraform Labs and its CEO Do Kwon were charged by the SEC for purportedly organizing fraudulent practices involving digital asset securities. Crypto exchange Kraken, too, was slapped with two charges relating to its staking products and agreed to settle for $30 million the week before.
The regulator met with Katsuyama on August 16 and again in November right around the time of FTX’s demise, per Fox Business. Katsuyama reportedly persisted in discussions with the SEC for an authorized exchange even after the FTX fiasco.Those meetings took place nearly to the time FTX filed for bankruptcy in November in what regulators are calling one of the biggest frauds in crypto history.
Government officials are accusing Bankman-Fried and his associates with theft of FTX customer assets to finance their lavish lifestyle and trading losses from an affiliated hedge fund, Alameda Research. Bankman-Fried pleaded not guilty and remains under house arrest until his trial in October and faces up to 115 years in jail. Other FTX executives have reached plea deals with prosecutors from the US Attorney’s office in Manhattan and are expected to testify in court as government witnesses.
Katsuyama is said to have continued his negotiations with the SEC for an approved exchange even after the FTX debacle; his potential partnership with Coinbase has not been previously reported, and he declined to comment on the matter.
A IEX spokeswoman told Fox Business: “We continue to consider ways that we can help provide a regulatory path for digital asset securities, including conversations with regulators and other market participants, but have not finalized any specific proposal that includes any third parties.”
