Members of the cryptocurrency community swiftly countered United States Securities and Exchange Commission (SEC) Chair Gary Gensler’s recent critical remarks about compliance within the crypto sector.
On December 22, Gensler posted on Twitter, expressing concerns about widespread noncompliance in the cryptocurrency industry. He suggested that such noncompliance erodes trust in the sector and leaves victims of recent crypto bankruptcies with little recourse but to “stand in line” in court. This statement from the SEC chair sparked immediate reactions from the crypto community. They pointed out that the SEC has been repeatedly asked to provide clear guidelines on what constitutes compliance. Utilizing Twitter’s Community Notes feature, which allows users to fact-check posts, community members noted the SEC’s lack of a definitive stance on compliance. They highlighted attempts by companies like Coinbase to seek regulatory clarity from the SEC over the past few years.
Billy Markus, the creator of Dogecoin (DOGE), also responded to Gensler’s post. He criticized the SEC chair for not establishing concrete rules, going as far as to label Gensler as “useless in every single way.” Ripple CEO Brad Garlinghouse joined in the criticism, calling Gensler’s post “stunning hypocrisy” and branding him a “political liability.” Garlinghouse accused Gensler of undermining the integrity of the SEC.
On the same day, the SEC acknowledged in a new filing its “deep regrets” over certain mistakes made during an enforcement action. Paul Grewal, Coinbase chief legal officer, seized on this admission. He contrasted the SEC’s expression of regret with Gensler’s harsh critique of the crypto industry, questioning why taxpayers or judges should trust the SEC’s expressions of regret given the apparent disconnect.
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