Investors Warned: Don’t Invest Without Due Diligence

• John Stark, former chief of the SEC office of internet enforcement, joined CNBC’s ‚Squawk Box‘ to discuss the collapse of crypto exchange FTX.
• 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“ was raised as an example of the lack of due diligence involved in FTX investments.
• Stark defended the state agencies, pointing out their successes in stopping ICOs, lending programs, and agreements for future tokens.

John Stark, 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. During the segment, host raised the issue of due diligence, more specifically the lack thereof, and asked Stark what can be done about that.

Stark replied by quoting Sam Bankman-Fried himself, who said “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 agreed that the model is different, and to him it’s absurd, but noted that these are investors like everyone else. The host then asked which agency should be ashamed that we’re in this situation, where customers have lost their money and have no claims on anything coming out of bankruptcy.

In response, Stark defended the state agencies, pointing out the successes they’ve had in stopping ICOs, lending programs, and agreements for future tokens. He also stressed the importance of due diligence when it comes to investing, emphasizing that investors should look for value and the long-term when making investments.

In conclusion, Stark reminded viewers that investments require careful consideration, and investors should always perform due diligence to ensure that the investments they make are sound and have the potential for long-term gains. He commended the state agencies for their efforts in protecting investors, and warned against investing in products or services without proper research.