SEC Chairman warns of rampant violations in the crypto industry, tweet flagged by community for being focused solely on enforcement and regulation.

The Chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, unexpectedly shared a previously aired interview clip on Twitter on the 22nd, emphasizing the numerous violations in the cryptocurrency field. Interestingly, the community note on Twitter under Gensler's tweet stated that the SEC only uses enforcement instead of regulation.

SEC Chairman Gary Gensler Interview: Will review Bitcoin spot ETF based on court rulings

Gary Gensler: Violating Cryptocurrency Companies Will Only Queue in Bankruptcy Court

Gensler tweeted that there are many violations in the cryptocurrency space, and when many people are harmed, their only option is to queue in bankruptcy court. This will weaken confidence and may make it difficult for other honest participants to compete.

He quoted his previous statement on CNBC, stating that securities laws can help investors with information disclosure, make investment decisions, and protect investors from fraud and market manipulation. Gensler said:

The crypto space has too many bad actors, scams; it's really a wild west globally.

Embarrassingly, Twitter's Community Notes feature below Gensler's tweet noted that the SEC will only enforce rather than regulate.

Vitalik's insightful analysis of Twitter's fact-checking tool, even Musk praised it, what is Community Notes?

Twitter's Community Notes Rebuttal: SEC Only Enforces Regulation

Community Notes pointed out:

Crypto companies like Coinbase, a publicly listed company regulated by the SEC, have been striving to clarify the SEC's compliance guidance in recent years. The SEC has not taken a clear position and relies on enforcement for regulation.

Although Gensler is often criticized, perhaps the crypto community should be grateful that during his tenure, he approved Bitcoin futures ETF, which he previously blocked as "market manipulation," and now there is potential for approval of spot ETFs.

Looking at the deadlines for 13 ETF reviews:

Bitcoin Spot ETF Update: SEC Holds Meetings with BlackRock and Others, Remains Optimistic about Approval Deadline on January 10

There is a lot of noncompliance in the crypto space. It undermines confidence when so many people have been hurt and all they can do is stand in line in the bankruptcy court. Further, this can make it hard for the good faith actors to compete. pic.twitter.com/9L1WKa4R6S

— Gary Gensler (@GaryGensler) December 21, 2023