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Ripple General Counsel: SEC crackdown doesn't protect investors

 


Ripple Labs General Counsel Stu Alderoty has responded to a recent statement by US Securities and Exchange Commission Chairman Gary Gensler, saying the regulator's crackdown on the crypto market is failing to protect consumers.


In a Wall Street Journal (WSJ) opinion piece Monday, Alderoty claimed the SEC is brushing other “regulators aside” instead of focusing on providing regulatory clarity for crypto.


As an example, he cited the SEC's recent crackdown on BlockFi , which put the company "on the auction block" and two other similar companies "bankrupted." He explained: 


"Consumers were not protected, they were left with their losses."

The article was in response to Gensler's Aug. 19 article, also published in WSJ, defending  the regulator's crackdown on the cryptocurrency industry.


The Ripple lawyer, on the other hand, says the SEC has failed to provide sufficient clarity on crypto regulation and has instead presented itself as a “cop on the beat” for crypto.


He claims the chairman would "push aside his fellow regulators" and "rush ahead" of President Biden's executive order. In this, regulatory authorities were called on to cooperate in the regulation of cryptocurrencies.


The executive order mentioned is the ordinance of March 9, 2022, which the President issued. This was to ensure that the SEC and CFTC would coordinate and work together to develop a crypto regulatory framework .


However, Aldetory claims the SEC would not comply with the Executive Order nor provide “regulatory clarity for crypto.” Instead, they are "protecting their turf at the expense of more than 40 million Americans in the crypto economy."


Gensler argued in his article that US federal laws were created to protect investors and "there is no reason to treat the crypto market any differently than the rest of the capital markets just because it uses a different technology."


However, many critics disagree. Forbes contributor Roslyn Layton said in an opinion piece Monday that the SEC's decision to double the staff of the Crypto Assets and Cyber ​​Unit and the SEC's "regulate by enforcement" approach prove otherwise .


Earlier this month, U.S. Attorney John Deaton also claimed that Gensler and the SEC were intentionally targeting cryptocurrencies and that they had pushed the boundaries of current cryptocurrency regulation:


“You don't have to be a constitutionalist to know that the SEC has limited jurisdiction over the crypto industry. Unless Congress says otherwise, the Commodity Futures Trading Commission is the primary regulator of non-traditional securities investments – responsible for the regulation of digital assets.

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