In the wake of last week’s ruling on the United States Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs, SEC Chair Gary Gensler has spoken publicly about the decision and its implications for the cryptocurrency industry.
During a talk on artificial intelligence at the National Press Club on July 17, Chair Gensler was asked about the recent court ruling on the Ripple case and whether it affects his stance on cryptocurrency regulation. In response, Gensler acknowledged the significance of protecting institutional investors and recognized the court’s attention to the concept of “fair notice” in their decision. However, he expressed disappointment with the court’s stance on retail investors and their investments in cryptocurrencies. Despite this disappointment, Gensler stated that the SEC is currently reviewing and assessing the court’s opinion.
Later in the day, the SEC Chair addressed the Ripple ruling once again during an interview with Yahoo Finance. Gary echoed his earlier remarks, expressing the SEC’s satisfaction with the court’s recognition of tokens targeted at institutional investors as securities. However, he reiterated the SEC’s concerns about the ruling’s impact on retail investors and their access to cryptocurrencies. Gensler assured that the SEC is actively examining this aspect of the ruling and carefully considering its potential ramifications.
Gensler Hints at Potential Regulation of Crypto Exchanges Amidst XRP Relisting
During the interview conducted by Yahoo Finance, Gensler acknowledged that several crypto exchanges view the XRP relisting as a significant victory for the industry. However, he refused to comment on whether this decision could set a precedent for other similar cases. He cited the ongoing legal battles involving XRP as the reason for withholding any concrete response.
One of the main concerns raised by Gensler during the interview was the amalgamation of various services offered by crypto platforms. He noted that some of these services would not be permitted in other segments of traditional capital markets. This observation suggests that the SEC may be contemplating stricter regulations to address potential risks associated with these practices.
When questioned about the possibility of crafting customized rules specifically for the crypto space, Gensler asserted that it is still too early to make any definitive decisions. He pointed out that the recent developments, including the XRP relisting, have occurred only a few business days ago. However, Gensler emphasized that the SEC already possesses existing rules pertaining to securities exchanges, which might have implications for the crypto industry.
Another significant topic raised during the interview was proposed Republican legislation that could introduce a decentralization test for crypto assets. On this matter, Gensler opted to withhold an official comment, suggesting that the SEC would respond directly to inquiries from Congress members.