Benzinga - by Murtuza Merchant, Benzinga Staff Writer.
U.S. Securities and Exchange Commission Chair Gary Gensler says widespread noncompliance among cryptocurrency companies is costing investors.
What Happened: "There is a lot of noncompliance," Gensler said in a recent interview with CNBC. "This is really the Wild West."
Gensler explained that companies aren't in adherence to securities laws designed to protect investors from fraud and manipulation.
The trend isn't exclusive to the U.S., he added, but rather a pervasive trend across the global crypto sphere.
"When so many people have been hurt," Gensler stated, "all they can do is then stand in line at a bankruptcy court."
Pushback On Twitter: Leveraging the Community Notes function on X, formerly Twitter, which permits users to verify the accuracy of posts, the online community highlighted the lack of a definitive position from the SEC in Gensler's tweet.
Additionally, the annotation emphasized attempts by firms such as Coinbase to seek regulatory guidance from the SEC over recent years.
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
Gensler On Crypto Compliance: Widespread noncompliance poses a significant challenge for investors
who are left holding the bag in bankruptcy court queues, Gensler said.
It also hurts legitimate players within the industry, he said.
"It's hard for the good faith actors even to compete," Gensler said, highlighting the unfair disadvantage ethical businesses face due to the rampant lawlessness surrounding them.
The path to achieving this potential, he argues, lies in prioritizing compliance and creating a fair and trustworthy ecosystem for all participants.
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