Gary Gensler, the chairman of the Security and Exchange Commission, recently published an opinion piece and Ripple Labs General Counsel Stu Alderoty has responded by claiming that the regulator’s crackdowns on the cryptocurrency industry aren’t protecting consumers.
The Wall Street Journal (WSJ) published an opinion piece on August 28 headlined “The SEC Wants to Be America’s Crypto Cop” in which Alderoty stated that the SEC is “pushing aside his follow regulators” rather than focusing on giving regulatory certainty for the crypto industry.
Ripple Labs’ counsel used the recent “shakedown” of BlockFi by the SEC as an example, stating that it caused the company to wind up “up on the auction block” and two other comparable companies to “belly up,” leaving the customers “holding the bag” since they weren’t protected.
The article was written in reaction to Gensler’s “The SEC Treats Crypto Like the Rest of the Capital Markets” article, which was also published on WSJ on August 19 and defended the regulator’s crackdown on the cryptocurrency business. Gensler stated in his piece that there is “no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.”
Ripple Counsel accuses SEC of not being transparent enough
However, the Ripple counsel claims that the SEC hasn’t been transparent enough about cryptocurrency regulation and instead positions itself as “the cop on the beat” for cryptocurrency. He asserts that the chairman is “pushing aside his fellow regulators” and “front-running” President Biden’s executive order, which calls for cooperation among authorities in the area of cryptocurrency regulation.
The “Ensuring Responsible Development on Digital Assets” executive order, to which Alderoty referenced, was signed on March 9, 2022, and it aims to ensure that the Commodity Future Trading Commission (CFTC) and the SEC coordinate and work together to build a regulatory framework for cryptocurrencies.
Alderoty asserts that the SEC is instead “protecting its turf at the expense of more than 40 million Americans in the crypto economy” and has not only disregarded the executive order but also failed to provide any “regulatory clarity for crypto.”
Ripple and SEC are currently in a high-profile legal fight and the former’s CEO said that the firm will leave the United States if it loses the lawsuit.