Ripple CEO Brad Garlinghouse has criticized outgoing SEC Chair Gary Gensler for continuing a “regulation-by-enforcement” strategy during his tenure. Garlinghouse’s comments come amid ongoing legal disputes between Ripple and the SEC, as the agency prepares to file its opening brief in its appeal of Ripple’s recent legal victory on January 15.
Ripple CEO Brad Garlinghouse Attacks Gary Gensler
On X (previously Twitter), Ripple CEO Brad Garlinghouse has accused Gary Gensler of ignoring the 2024 election and the people’s concerns. “Gensler, very much on brand,” Garlinghouse wrote, “completely commits to his failed regulation-by-enforcement agenda to the bitter, bitter end.” This criticism comes in light of Ripple’s legal team seeking to file a motion for the SEC to extend the January 15th due date for the opening brief.
Nevertheless, the SEC did not allow the request, and this elicited bitter remarks from the Ripple officials. Stuart Alderoty, Ripple’s Chief Legal Officer, described the agency’s decision as “a waste of time and taxpayer dollars.”
Alderoty also talked positively regarding the legal standing of Ripple in the ongoing case at the appellate level. He continued, “We eagerly anticipate engaging with new SEC leadership to address this issue,” given that Gary Gensler is set to leave the SEC chairmanship on January 20.
The legal dispute was born from the SEC’s lawsuit filed in December 2020, which accused Ripple of offering XRP as an unregistered security. However, in a 2023 ruling, the court ruled in favor of Ripple, stating that the XRP sales to retail investors were not securities, but the SEC has pursued an appeal of the decision.
Gary Gensler Reflects on Crypto Policy Ahead of Departure
Ahead of his exit from the commission, SEC Chair Gary Gensler has come out to explain his stance on regulating the cryptocurrency market in an interview with CNBC. Gensler argued that Bitcoin is not a security, comparing it to gold as a commodity that has demand across the globe. ”Bitcoin is a highly speculative, volatile asset,” Gensler said, comparing it to other assets in which people have been investing for ages, such as gold.
Nonetheless, Gensler reaffirmed his position that all tokens apart from Bitcoin are likely to be considered as securities regulated by the existing US legislation. He stated that the industry has not complied with the anti-money laundering, sanctions, and securities regulations in most cases.
Gensler has been under fire for what the SEC has done through enforcement actions rather than through rulemakings, a view that Ripple and other industry participants have also expressed. Coinciding with this move, a transaction of 100 million XRP or over $265 million was moved between two unknown wallets as regulators are expected to clear the air soon. Furthermore, experts are currently forecasting a possible upward movement in XRP price with some even anticipating the coin to hit $8 soon.
Ripple vs. SEC: What’s Next?
The SEC’s appeal comes after a significant legal setback, with courts recently criticizing the agency’s enforcement practices. A ruling from the Third Circuit Court of Appeals labeled the SEC’s actions in a separate case against Coinbase as “arbitrary” and “capricious.” The court called for greater transparency and clarity in the SEC’s decision-making processes.
As Gensler steps down on January 20, industry stakeholders anticipate changes under new SEC leadership. Ripple CEO Brad Garlinghouse has expressed optimism about resolving the legal dispute with the incoming administration. Meanwhile, speculation continues around potential regulatory reforms, including clearer guidelines for digital asset classification.
Moreover, JPMorgan analysts have also noted increased optimism in the crypto sector, pointing to the potential for new exchange-traded funds (ETFs) focused on assets like XRP and Solana (SOL).
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