Following the recent public address by Gary Gensler, the chairman of the United States Securities and Exchange Commission (SEC), in which he criticized the cryptocurrency industry for noncompliance, the CEO of blockchain company Ripple has hit back.
As it happens, Brad Garlinghouse called out Gensler on the “stunning hypocrisy from the person who cozied up to the biggest fraud in recent memory” and referred to him as “a political liability” while commenting on the video of the SEC boss’s speech in an X post on December 22.
Specifically, he was alluding to Gensler’s alleged close ties with Sam Bankman-Fried, the CEO of the collapsed crypto exchange FTX, which had earned the SEC chief a hearing before the US House Financial Services Committee, with chair Patrick McHenry accusing him of lack of transparency.
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As the Ripple CEO argued:
“Gensler is a political liability whose actions have decimated consumers and destroyed the integrity of the SEC while remaining buddy-buddy with Wall Street.”
Indeed, the SEC boss earlier published on his X profile a part of his appearance at CNBC’s ‘Crypto World’ on December 14, where he said that there was “a lot of non-compliance with the securities laws that are here to (…) protect you against fraud and manipulation” in the cryptocurrency sector.
“And there’s been far too much fraud and bad actors in the crypto field. There’s a lot of noncompliance, not only with the securities laws but other laws around anti-money laundering and protecting the public. This is really the Wild West, and it’s around the globe.”
As he added, this “can undermine confidence when so many people have been hurt, and all they can do is then stand in line at a bankruptcy court (…), and it’s hard for the good faith actors even to compete because there are so many challenges elsewhere.”
Notably, Ripple has fought a lengthy courtroom battle against the SEC, with the regulator accusing the blockchain company of illegal sales of XRP, which the agency considers security. However, Judge Analisa Torres in July ruled that retail XRP sales did not constitute securities sales.
Having said that, despite an apparent win, the consequences of the courtroom ordeal have echoed across the industry, having cost Ripple over $100 million in legal fees to date, forcing it to look for hires outside the US, as well as affecting the price of XRP and with it, causing losses for the token’s holders.