SEC Chairman Gary Gensler expressed dissatisfaction with the recent court decision involving Ripple and its cryptocurrency, XRP, focusing on its impact on retail investors. The agency, he stated, is currently evaluating the implications of the ruling while underscoring the commitment of the SEC to maintain a firm regulatory hand on the cryptocurrency sector.
Gensler's Reflections on Ripple Court Verdict
Gensler aired his perspective on the landmark Ripple ruling while addressing a National Press Club luncheon on Monday.
Ripple's leading legal representative had interpreted the court's decision, asserting that XRP wasn't a security and that all transactions including sales by executives, distributions to developers, charities, and employees were exempt from this classification. The only exception was direct past sales of XRP to institutional clients, which were seen as investment contracts.
When questioned on how the Ripple ruling impacts his view on digital asset regulation and whether it necessitated immediate federal legislation for regulatory clarity, Gensler responded with an assertion of the SEC's mission. He expressed satisfaction with the court's emphasis on safeguarding institutional investors and appreciating the 'fair notice' doctrine but displayed regret concerning the court's stance on retail investors.
The Ripple ruling was met with a mixed reaction within the crypto community. Some experts, such as John Reed Stark, the ex-SEC internet enforcement chief, and attorney Bryan Jacoutot, voiced their reservations about the stability of the verdict, hinting at the possibility of an overturn.
Continued SEC Enforcement on the Crypto Horizon?
On being queried about the next steps for SEC in its crypto regulation efforts, Gensler affirmed that the SEC's function remained in protecting markets, public investors, and capital formation, whilst ensuring adherence to congressional laws.
He went on to assure, "Our goal is to guide non-compliant firms towards compliance, refraining from passing premature judgments on any. We remain dedicated to defending the investing public."
Post the Ripple verdict, numerous lawmakers in the United States are calling for legislative action to regulate the crypto industry and back the judge's determination in the Ripple case.
