In a guest essay for The New York Times, former SEC enforcement official John Reed Stark and Duke University lecturer Lee Reiners have issued a stark warning: the U.S. Securities and Exchange Commission’s shifting approach to crypto enforcement could set the stage for another financial meltdown.
The pair argue that by easing oversight on digital asset markets, while banks simultaneously expand into token-related services, regulators may be enabling hidden risks to build up across the financial system—much like the lead-up to the 2008 crisis.
Stark and Reiners point out that the weakening of crypto-specific enforcement efforts has blurred the line between speculative digital assets and federally regulated banking activity. As token platforms and lenders gain more access to traditional financial infrastructure, they say the result could be systemic risk without the necessary guardrails.
According to the essay, these new linkages remain largely untested and could collapse under economic stress, threatening broader financial stability.
Reversal of Hard-Won Safeguards?
The authors describe the SEC’s current direction as dismantling hard-won legal and regulatory separations designed to insulate traditional banking from risky, unregulated financial products.
They argue that without strong enforcement and clearer oversight, the expanding influence of crypto in mainstream finance may be laying the groundwork for “a new and dangerous era.”
Their call comes amid broader debates about how digital assets should be regulated—and who should be responsible for keeping them in check.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
