CEO of Ripple Brad Garlinghouse has attacked Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), for saying that he has the jurisdiction to determine whether cryptocurrency tokens are securities rather than relying on the laws that govern his agency’s authority. According to the CEO of Ripple, « elected officials in the United States ought to pay note. »
CEO of Ripple slams Gensler, chair of the SEC, over the term « security. »
The Securities and Exchange Commission (SEC) of the United States has come under fire from Ripple Labs CEO Brad Garlinghouse for determining whether bitcoin tokens qualify as securities. Thursday prior, Garlinghouse tweeted:
“It is incomprehensible that the SEC Chair would claim that he, and not the laws from which his agency draws its authority, determines what constitutes a security. It’s time for American elected officials to pay attention.”
Garlinghouse said:
“Why would you ever want to provide clarity about what’s ‘in or out’ when you act like an authoritarian overseeing a $2.2B bloated agency? Ambiguity can pass for power when there is no clear jurisdiction”.
According to a comment from the SEC chairman,
“If Congress were to act, though I don’t think we need these authorities, not to undermine accidentally through definitions of what’s in or out, or in essence allowing for conflicts that we don’t allow.”
According to Gensler, “cover most of the activity that’s happening in the crypto markets.” Several of the legislative changes, in my opinion, will damage the securities remit if they are put into effect.
Gensler has emphasized multiple times the need of bitcoin exchanges and lending platforms coming to discuss how to comply with the SEC. The securities regulator, according to Garlinghouse, visited with bitcoin companies primarily to gather leads for its Enforcement Division. It has also been widely criticized because the SEC has failed to set clear regulatory guidelines, which makes it difficult for companies working in the bitcoin industry to ensure compliance.
The cryptocurrency exchange Coinbase, which is listed on Nasdaq, has received a Wells notice from the SEC for potential violations of securities laws. Despite regularly asserting that all cryptocurrency tokens—aside from bitcoin—are treated as securities, Gensler said in its statement that “The SEC would not let crypto companies “come in and register” – we tried.”
According to the lawyer for XRP holders, Satoshi Nakamoto’s Bitcoin (BTC) could’ve also been used as security
John Deaton is confident that even Bitcoin may have been recognized as a type of security if this had happened when Satoshi Nakamoto was still alive.
When Satoshi Nakamoto was the sole or one of the few Bitcoin miners, John Deaton claims that if Satoshi Nakamoto had made a $100,000 offer to sell 100,000 BTC, it would have been viewed as an offer of unregistered securities. A pro-crypto lawyer and the legal representative for XRP holders both expressed this opinion in conjunction with the most recent criticism of U.S. authorities on the cryptocurrency industry and current rules in this field.
The lawyer’s tirade began with a claim that the Howey test, which is used to identify a security, and the phrase « investment contract, » which is used by organizations like the SEC to classify some cryptocurrencies, are both misused. The attorney also noted that it is intriguing because both of these legal issues date back to the early 20th century.
He thinks that it is irrelevant how a cryptocurrency was distributed, such as the initial coin offering for Ethereum (ETH) or the sale of XRP by Ripple. Deaton claims that the distribution technique alone disqualifies the asset—in this case, the digital code—from being considered an unregistered security.
Using Bitcoin as an example, Deaton draws the conclusion that, if we follow the regulators’ line of thinking, it would seem that every cryptocurrency is a security at the moment of its distribution.
