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Ripple’s General Counsel Getting Political to Take Dig at Gensler

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Mon, 13/02/2023 - 17:59
Ripple’s General Counsel Getting Political to Take Dig at Gensler
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Stuart Alderoty, Ripple's chief legal officer, recently took a dig at Gary Gensler, the head of the U.S. Securities and Exchange Commission (SEC), in a tweet that implies that Gensler could be a political liability for President Joe Biden. 

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The tweet notes that over 40 million Americans own crypto, and many of them are between the ages of 18 and 34 and racially diverse.

The comments come after the SEC's enforcement action against crypto exchange Kraken. Gensler warned other platforms to "take note" of Kraken's recent move to halt its staking service in the country and pay a $30 million fine. 

During an appearance on CNBC's "Squawk Box," Gensler stated that companies like Kraken can offer investment contracts and schemes but have to have full, fair, and truthful disclosure. 

Gensler urged firms offering staking services to come into compliance and perform proper disclosures and registration. 

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His enforcement action against Kraken has already attracted criticism. SEC Commissioner Hester Peirce called it a "paternalistic" and "lazy" move. She added that the regulator's solution to a registration violation was to shut down entirely a program that has served people well.

Gensler said the regulator is using all available tools and is talking directly to market participants about compliance, insisting that the regulator is "technology neutral."

The recent developments could have broader implications for the crypto industry, especially with the possibility of the SEC regulating the industry.

Ripple has been involved in a long-standing legal dispute with the formidable regulator. The SEC took the company for allegedly violating securities laws through the sale of its XRP tokens. Notably, the enforcement action was initiated by Jay Clayton, who was appointed by former president Donald Trump.  

The case is now inching closer to a resolution after the SEC filed its motion for summary judgment against Ripple in September.

Alderoty has previously criticized the SEC for attempting to orchestrate a "political power grab" in its cryptocurrency regulation approach.  

The lawsuit alleged that XRP, Ripple's cryptocurrency, was a security and therefore subject to SEC regulation. Ripple has disputed this claim and has argued that XRP is a currency, like Bitcoin or Ether.

The SEC's actions against Kraken and Ripple, and Gensler's anti-crypto stance, have made some in the industry anxious about the future of crypto regulation in the United States. The crypto industry is hoping for more clarity and a more favorable regulatory environment.

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