The head of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, expressed his displeasure with a recent court decision that ruled the XRP token of Ripple to be “not in and of itself” a security. Gensler emphasized his worries about the effect of the decision on individual investors while acknowledging that it protects institutional investors by rebutting the fair notice defense in the Ripple case. Gensler was speaking at a National Press Club event in Washington, DC.
The court decision that prompted Gensler’s remarks said that XRP’s designation as a security would rely on its usage context. Additionally, it made it clear that Ripple’s “programmatic” sales of XRP, in which the business uses trading algorithms to sell its owned assets on exchanges, did not qualify as a securities offering.
Gensler has led the SEC in an aggressive effort to regulate the cryptocurrency market, and he said that the drive to bring transparency and compliance to the sector will continue notwithstanding the decision. He stressed that the SEC’s main objective is to safeguard the investing public and make sure that businesses engaged in the cryptocurrency industry comply with legal requirements.
The remaining questions in the case have been assigned to Magistrate Judge Sarah Netburn in connection with the continuing legal dispute between Ripple and the SEC. Notably, Judge Netburn had earlier mandated the release of the ‘Hinman records,’ which contributed to the decision in Ripple’s favor.
The SEC is committed to ensuring compliance within the cryptocurrency business and protecting investors’ interests, according to Gensler’s words, despite the fact that the legal environment around cryptocurrencies is still unclear. It is vital for businesses in the industry to regularly watch regulatory developments to ensure their activities are compliant with legal requirements since the decision regarding Ripple’s XRP coin might have consequences for other digital assets.
