Gensler has expressed concerns about the lack of proper disclosures for many cryptocurrency tokens, highlighting the prevalence of fraud in the industry.
Stuart Alderoty, Ripple’s chief legal officer, has accused U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler of overstepping his authority. This accusation followed Gensler’s comments to the Financial Times about the SEC adjusting to recent legal setbacks.
Note to @GaryGensler: The courts aren’t “adjusting”…they are finding that you are breaking the law by exceeding your statutory authority. https://t.co/rne7JRygm2
— Stuart Alderoty (@s_alderoty) June 26, 2024
Since taking office in 2021, Gensler has aimed for significant reforms in financial markets, including those involving US Treasury bonds and climate disclosures. However, his initiatives have faced several legal challenges. In July 2023, Judge Analisa Torres ruled that secondary sales of Ripple’s XRP tokens were not securities, dealing a blow to the SEC. In August 2023, Grayscale won a key case against the SEC, leading to the approval of several spot Bitcoin ETFs in January. Recently, the SEC also approved multiple-spot Ethereum ETFs.
XRP Advocates Criticize the SEC’s Decisions
Gensler has expressed concerns about the lack of proper disclosures for many cryptocurrency tokens, highlighting the prevalence of fraud in the industry. At the Bloomberg Invest Summit, he stated that many crypto industry leaders are either in jail, facing jail, or awaiting extradition. In response to this, Ripple CEO Brad Garlinghouse criticized Gensler for failing to prevent the FTX fraud and suggested that Gensler should have been dismissed long ago.
XRP advocate John Deaton has also been vocal in his criticism of the SEC and Gensler. He accused them of harming small cryptocurrency investors, including those who invested in XRP. Deaton, who is running for the U.S. Senate, claimed that Gensler has caused more harm to small investors than anyone else in recent years. He also pointed out that Gensler had met twice with Sam Bankman-Fried, the founder of the collapsed crypto exchange FTX.
As the person who literally sued the @SECGov on behalf of tens of thousands of small investors, I can state with 💯 conviction that @GaryGensler and the SEC has caused more harm to investors than any other person or entity during the last several years. What Gensler fails to… https://t.co/kv2EIMSOw4
— John E Deaton (@JohnEDeaton1) June 26, 2024
The ongoing legal battle between the SEC and Ripple began in December 2020. Ripple’s CEO anticipates a final ruling in September and hopes for a favorable outcome.
Overall, the SEC has been intensifying its actions against cryptocurrency platforms and altcoins, labeling many as unregistered securities due to widespread noncompliance in the industry. This aggressive stance has led to increased scrutiny and legal challenges in the crypto space.