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

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. “

Interpretation of this information:

The message relates to concerns expressed by three US senators, which prompted John Reed Stark, a former Internet enforcement officer at the United States Securities and Exchange Commission, to comment on Twitter about a new player in the financial sector. Stark views Coin An as a shadow bank since it offers limit order, brokerage, custody, clearing, and settlement services, yet mints its currency without supervision or audit from the US. This makes it similar to FTX, which caused a large-scale bank run to ensue when withdrawals were suspended, leading to the collapse of the platform. Coin An’s customers may be at risk if the platform follows the same path. Moreover, whether Coin An’s customers are cut off or become unsecured creditors due to the platform’s collapse, it could lead to a disastrous investor massacre like FTX, Celsius, Block Fi, and Voyager, which have experienced similar issues.

The comment by John Reed Stark indicates that there are significant risks associated with Coin An, as the platform appears to operate outside the regulatory framework established by the United States.