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SEC Chair Gary Gensler Continues Tirade Against Crypto but Plays Coy on XRP Ruling Appeal


In a recent interview with Bloomberg TV, Gary Gensler, the Chair of the United States (US) Securities and Exchange Commission (SEC), skillfully avoided divulging the agency's forthcoming actions following Judge Analisa Torres' Summary Judgment favouring Ripple in the XRP Vs SEC lawsuit.

When directly questioned about the possibility of appealing the ruling, the SEC Chair deftly navigated the topic without providing a clear answer. It is worth noting that Gary had expressed his disappointment regarding the XRP ruling earlier. Meanwhile, the US SEC has officially stated its intention to pursue a thorough review of the Ripple lawsuit judgment, as evidenced in the Terraform Labs lawsuit.

A Little Recap
In a momentous ruling on 13 July 2023, the judge delivered a significant verdict, distinguishing the status of the XRP token based on its recipients. According to the ruling, the XRP token is classified as a security only when transacted with institutional investors, while its sale to retail investors falls under a different categorisation. As a result, Ripple emerged unscathed, as the court held that the company did not contravene federal securities law when selling the XRP token on public exchanges.

Many were quick to celebrate Ripple’s victory but others pointed out that it was a partial win for Ripple as well as a partial win for SEC. An appeal from the SEC seems likely as the majority speculated but the SEC Chair has been playing coy and evading the agency’s actions against the ruling thus far.

Gary Gensler the Evader VS Gary Gensler the Enforcement Tyrant
Employing a strategic silence, the Gary deftly sidestepped inquiries about the agency's response to the Summary Judgment ruling. While pressed for answers, Gensler maintained that the SEC has not yet reached a decision on the matter, leaving the cryptocurrency community in suspense.

Not surprisingly, he once again, like clockwork, sounded the alarm on the state of the crypto market, unleashing a stern warning to potential investors. The crypto market, in his view, continues to run afoul of securities laws, irrespective of the specific XRP ruling.

Gary minced no words, describing the industry as "rife with fraud, rife with hucksters," cautioning anyone venturing into this domain to exercise utmost vigilance. He emphasised that investors should be fully aware of the inherent risks and lack of protective measures in the crypto space that “a lot of investors should be aware that it’s not only a highly speculative asset class, it’s also one that they currently should not assume they are getting the protections of the securities law.”

Interestingly, he also advocated for the application of securities laws to safeguard investors despite the decentralised nature of cryptocurrencies.

Gary's scrutiny did not end there. He turned his attention to exchanges, raising intriguing concerns about their adherence to laws that govern other financial exchanges. He elaborated, “You as investors are not getting the full, fair, and truthful disclosure, and the platforms and intermediaries are doing things that we would never in a day allow or think the New York Stock Exchange or NASDAQ would do.”

He also added that exchanges “often are commingling and trading against you and have market makers that are on the other side of your trades.” He did admit that the industry has “good faith actors,” however “there are far too many that aren’t.”

It did not come as a shock when social media was quick to mock him, some stating that “He hates being specific about anything because that where his house of cards falls down,” and others calling him a “corrupt clown” along with clown memes. Very apt I would say the least.

What’s Next?
The uncertainty surrounding the SEC's next move and the implications of the XRP case continue to intrigue stakeholders in the cryptocurrency community and beyond. As the SEC intensifies its oversight of the crypto landscape, a pivotal question emerges: How will this drive towards greater regulatory scrutiny shape the future of cryptocurrencies and the exchanges that facilitate their trading?

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