In a significant turn of events in the cryptocurrency landscape, Ripple CEO Brad Garlinghouse has publicly challenged U.S. Securities and Exchange Commission (SEC) Chain Gary Gensler as the agency prepares to file an opening brief in its appeal against Ripple’s recent legal victory. Garlinghouse’s remarks underscore growing frustrations with Gensler’s ‘regulation by enforcement’ strategy, which many in the crypto community view as stifling innovation and clarity within the industry. As Ripple’s legal battle over the classification of its digital asset, XRP continues, the stakes are high not only for Ripple but for the broader cryptocurrency ecosystem. With the 2025 elections approaching, Garlinghouse’s call-out reflects a pivotal moment in the ongoing dialogue between regulators and industry leaders.
Ripple CEO Brad Garlinghouse Criticizes Gary Gensler
Ripple CEO Brad Garlinghouse has sharply criticized SEC Chain Gary Gensler for his ‘regulation by enforcement’ strategy, particularly as the SEC prepares to file its opening brief in its appeal against Ripple’s recent legal victory. On X (formerly Twitter), Garlinghouse accused Gensler of ignoring the concerns of the public and the upcoming 2025 election, stating ‘Gensler, very much on brand, completely commits to his failed regulation by enforcement agenda to the bitter, bitter end.’
Ripple’s legal team sought an extension for the January 15 deadline but was denied by the SEC, prompting further frustration from Ripple officials.
As the U.S. Securities and Exchange Commission (SEC) prepares for a leadership change on January 20, 2025, it continues to advance its enforcement actions, including the ongoing case against Ripple. On January 14, Ripple’s Chief Legal Officer, Stuart Alderoty, announced that the SEC would not grant an extension for filing a brief in its appeal of a judgment that found Ripple liable for $125 million due to allegations of using XRP as an unregistered security.
Alderoty criticized the SEC’s decision as a ‘waste of time and taxpayer dollars’ reflecting the frustration within Ripple’s leadership. Despite this setback, Alderoty expressed confidence in Ripple’s position on appeal and optimism about collaborating with the new SEC leadership to resolve the matter effectively.
Gary Gensler Reflects on Crypto Policy Ahead of Departure
In a recent interview, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler clarified his position on cryptocurrency regulation ahead of his departure from the agency. He stated that Bitcoin should not be classified as a security, likening it to gold, which has global demand as a commodity. Gensler describes Bitcoin as ‘a highly speculative, volatile asset,’ emphasizing its widespread appeal among investors.
He cautioned, however, that many other cryptocurrencies could fall under securities laws, necessitating proper disclosures to protect investors. Gensler’s remarks reflect his ongoing commitment to regulatory oversight in the crypto space.
Gensler reiterated his belief that any tokens other than Bitcoin will probably be regarded as securities according to current US law. He claimed that in the majority of instances, the industry has not complied with the securities, anti-money laundering, and sanctions laws. Although Ripple and other industry players have also voiced this opinion, Gensler has come under fire for the SEC’s enforcement efforts rather than rulemaking.
As regulators are anticipated to provide clarification shortly, a transaction of 100 million XRP, or more than $265 million, was transferred between two unidentified wallets concurrently with this activity. Additionally, experts are now predicting that the price of XRP may rise; some even believe that the coin could reach $8.
SEC vs. Ripple: What is Next?
The SEC’s appeal against Ripple follows a recent legal setback, with courts criticizing the agency’s enforcement practices. A ruling from the Third Circuit Court of Appeals deemed the SEC’s actions in a separate case against Coinbase as ‘arbitrary’ and capricious’, calling for increased transparency in decision-making.
As Gary Gensler prepares to step down on January 20, 2025, industry stakeholders anticipate a shift in regulatory approach under new leadership. Ripple CEO Brad Garlinghouse expressed optimism about resolving the ongoing legal dispute with the incoming administration.
Additionally, JPMorgan analysts noted heightened optimism in the crypto sector, highlighting the potential for new exchange-traded funds (ETFs) focused on assets like XRP and Solana (SOL), signaling a possible resurgence in market confidence.
Conclusion
As the U.S. Securities and Exchange Commission (SEC) navigates a period of transition with Gary Gensler’s impending departure, the cryptocurrency landscape stands at a pivotal juncture. The recent court rulings criticizing the SEC’s enforcement practices have sparked calls for greater transparency and clarity in regulatory frameworks. industry leaders like Ripple’s Brad Garlinghouse are hopeful that new SEC leadership will foster a more constructive dialogue, potentially leading to clearer guidelines for digital asset classification. With increasing optimism in the crypto sector, bolstered by speculation around new exchange-traded funds (ETFs), stakeholders are eager to see how these developments will shape the future of cryptocurrency regulation. The coming months could prove crucial in redefining the relationship between regulators and the burgeoning digital asset market, setting the stage for innovation and growth within the industry.