Ripple Labs General Counsel Stu Alderoty has countered a recent op-ed by US Securities and Exchange Commission (SEC) Chairman Gary Gensler, arguing that the regulator’s maneuvering in the cryptocurrency market they are not protecting consumers.
In an op-ed published Monday in the Wall Street Journal (WSJ) titled “The SEC wants to be America’s crypto cop,” Alderoty claimed that the SEC is “sidelining its next regulators” instead of focusing on providing regulatory clarity for cryptocurrencies.
He gave as an example the recent “shakedown” of BlockFi by the SEC, which led to the company ending up “on the auction block” and two other similar companies going “under,” arguing:
“Consumers were not protected, they were left abandoned.”
The article was published in response to Gensler’s Aug. 19 article “The SEC treats cryptocurrencies like the rest of the capital markets,” which was also published in the WSJ and which defended the regulator’s pressure measures on the cryptocurrency industry.
Nevertheless, Ripple’s adviser maintains that the SEC has not provided enough clarity on cryptocurrency regulation and instead declares itself to be “the policeman on duty” for cryptocurrencies.
He states that the president is “bypassing his fellow regulators” and “preempting” President Biden’s executive order, which asks regulators to help regulate cryptocurrencies.
The executive order that Alderoty was referring to is the one to “Ensure Responsible Development of Digital Assets,” which was signed on March 9, 2022 to ensure that both the SEC and the Commodity Future Trading Commission (CFTC) coordinate and collaborate in the establishment of a regulatory framework for cryptocurrencies.
However, Aldetory claims that the SEC has not complied with the executive order or provided any “regulatory clarity for cryptocurrencies.” and that instead he is “protecting his turf at the expense of more than 40 million Americans in the crypto economy.”
Gensler argued in his article that US federal security laws were designed to protect investors and that “there is no reason to treat the cryptocurrency market differently from the rest of the capital markets just because it uses different technology.”
However, many critics disagreeand Forbes writer Roslyn Layton listed in a Monday op-ed the SEC’s decision to double its Crypto Assets and Cyber Unit staff and the SEC’s “regulation by application” approach as reasons to the contrary. .
Earlier this month, United States Attorney John Deaton also alleged foul play, in that Gensler and the SEC were intentionally targeting cryptocurrencies and that the limit of what they can currently do to regulate them has been exceeded:
“It doesn’t take a constitutional law expert to understand that the SEC has limited jurisdiction over the cryptocurrency industry; Unless Congress acts, front-line regulation of digital assets rests with the Commodity Futures Trading Commission, the main regulator of investments that are not considered traditional securities.”
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