Ripple CEO Brad Garlinghouse has strongly criticized Gary Gensler, the Chair of the US Securities and Exchange Commission (SEC), accusing him of “stunning hypocrisy” within the cryptocurrency industry. Garlinghouse’s rebuke is a direct response to Gensler’s recent comments regarding widespread noncompliance in the crypto space. Gensler emphasized the negative repercussions on individuals and the challenges faced by legitimate participants in competing on fair terms.
Gensler stated, “There is a lot of noncompliance in the crypto space. It undermines confidence when so many people have been hurt, and all they can do is stand in line in the bankruptcy court. Further, this can make it hard for the good faith actors to compete.”
In response, Garlinghouse highlighted that Gensler had “cozied up to the biggest fraud in recent memory” and accused him of causing harm to consumers while maintaining close associations with Wall Street.
This recent criticism from Garlinghouse is not the first instance of expressing disapproval toward Gensler’s actions. Earlier, he had likened Gensler’s approach to that of an autocrat and had called on Congress to pay attention to Gensler’s conduct. The Ripple CEO seems to persistently challenge Gensler’s stance on cryptocurrency regulations and his perceived alignment with certain financial interests.
Ripple CEO Is Not The Only One
Garlinghouse’s criticism of Gensler has garnered support from the broader crypto community, with many considering Gensler a primary adversary to the emerging industry. Stakeholders across the cryptocurrency landscape have voiced concerns about Gensler’s stringent regulatory approach, contending that the SEC is applying outdated securities laws to innovative crypto finance models such as decentralized autonomous organizations (DAOs) and decentralized finance (DeFi) protocols.
Prominent figures within the crypto space, including Dogecoin founder Billy Markus, have echoed these concerns, emphasizing the lack of clear rules for the evolving sector. The rallying of the crypto community against Gensler’s regulatory stance reflects a broader debate about adapting regulatory frameworks to accommodate the unique features and innovations of the rapidly evolving cryptocurrency industry.
Gensler Continues to Stick to His Stance
Despite criticism, Gensler has consistently defended his position, asserting that existing securities laws are adequate for the cryptocurrency industry. Under Gensler’s leadership, the SEC has initiated legal actions against major crypto firms like Coinbase and Binance, accusing them of violating securities laws. Furthermore, the regulator has categorized cryptocurrencies such as Solana, Cardano, and Polygon as crypto securities tokens in various legal actions.
In September, Gensler acknowledged that while not every token can be pre-judged, a substantial portion of the crypto industry falls under securities laws but remains non-compliant. This stance underscores his commitment to applying existing regulatory frameworks to the diverse landscape of cryptocurrencies, despite ongoing debates within the industry about the appropriateness of such an approach.
Gensler stated, “This crypto space, that much of it, without prejudging any one token, much of it is under the securities laws, but unfortunately, much of it is also non-compliant.” He emphasized that the crypto industry has had a detrimental impact on millions of investors who have experienced losses, highlighting the potential for these issues to extend beyond the crypto sector and impact the broader financial system.
In a more recent development, Gensler issued another warning regarding the prevalence of fraud in the crypto space, noting the presence of multiple “notorious fraudsters” operating within it. He emphasized that the concern goes beyond a singular instance, involving several instances of fraudulent activities in the cryptocurrency industry.
