- Ripple’s Chris Larsen condemns the SEC’s policy of regulation by enforcement, calls for Congress intervention.
- Recent court rulings label SEC’s crypto claims as “arbitrary” and highlight its inconsistent stance.
SEC’s Inconsistent Stand on Crypto Faces Backlash
In an unfolding saga, Ripple‘s executive chairman Chris Larsen vocally criticized the U.S. Securities and Exchange Commission (SEC) for its contentious ‘regulation by enforcement’ policy concerning cryptocurrencies. Notably, federal courts, too, have highlighted the regulator’s erratic approach. With strong terms like “arbitrary and capricious” used in the Grayscale lawsuit and “hypocrisy” mentioned by Judge Netburn in the Ripple lawsuit, the judiciary’s dissatisfaction is evident.
Larsen, echoing the concerns of many in the crypto community, made a clarion call to the U.S. Congress. He implored legislative bodies to intervene and put a stop to these seemingly irrational lawsuits initiated by the SEC. Larsen firmly stated,
“I sincerely hope we’re seeing the beginning of the end of the SEC’s policy of regulation by enforcement. The Courts are rejecting it, and now it’s time for Congress to take the lead on crypto policy.”
Courts Question SEC’s Approach
The SEC’s confrontational stance towards cryptocurrencies, particularly Ripple‘s XRP, has been met with skepticism and criticism not just from industry players, but also from the judicial system. Bill Morgan, an XRP lawyer, pointed out the SEC’s recurring losses in courts, questioning their continual decision to appeal against court judgments. Such actions, in his perspective, were
“absolutely lamentable.”
Further weighing in on the controversy, Ripple executives have expressed their optimism about winning the lawsuit against the SEC. They contend that the securities regulator has not adequately justified their allegations or provided clarity on whether the existing regulatory frameworks are apt for overseeing the burgeoning world of crypto.
I surmise the SEC tide has turned.
For example, the SEC's lawsuit against Impact Theory concluded with a $5 million disgorgement (which is nothing to laugh at), but that is based on total sales of almost $30 million.
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This seems a relatively kinder, gentler SEC. Almost cuddly. https://t.co/HzVFCu6xRd
— Jeremy Hogan (@attorneyjeremy1) September 6, 2023
Larsen, in a recent interview with Bloomberg, went a step further to call out the U.S. government and the SEC. He attributed the hostile policies of these institutions as major roadblocks, preventing cities like San Francisco from establishing themselves as the leading
“blockchain capitals of the world.”
The SEC’s adversarial approach has had real-time ramifications. XRP, Ripple’s cryptocurrency, observed a 0.5% decline in its price over the last day, currently hovering around $0.49. The fluctuations for the day saw a low and high of $0.493 and $0.503, respectively.
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