SEC Chair Gensler: Mixed Reactions and Ongoing Consideration in Response to Ripple Decision

Following the recent court ruling on the Securities and Exchange Commission’s (SEC) lawsuit against Ripple, SEC Chair Gary Gensler shared his views on the matter during a talk on artificial intelligence at the National Press Club on July 17. When asked about the impact of the ruling on his stance on cryptocurrency and the need for federal legislation to clarify regulatory oversight, Gensler responded:

“We are pleased with that decision, recognizing the importance of protecting institutional investors and the court’s emphasis on fair notice. However, we are disappointed with their views on retail investors. We are still evaluating and assessing the opinion.”

Later in the day, during an interview with Yahoo Finance, Gensler reiterated his earlier comments. He acknowledged that many crypto exchanges perceive the ruling as a victory and are relisting XRP. When asked if the decision could set a precedent, Gensler declined to answer due to ongoing litigation but acknowledged that crypto platforms often engage in practices that would not be allowed in other parts of the capital markets.

Regarding the possibility of customized rules for the crypto industry, Gensler stated that it is too early to reconsider at this point, as the ruling is recent. However, he highlighted that the SEC already has existing rules defining what it means to be a securities exchange.

Gensler was also questioned about proposed Republican legislation that aims to establish a decentralization test for crypto assets. He indicated that the SEC would reserve comments on draft legislation for direct inquiries from members of Congress.

During the discussion, Gensler alluded to the original paper by Satoshi Nakamoto, who he humorously referred to as “whoever she was,” which envisioned value transfer on the internet without intermediaries. However, Gensler noted that despite the ideals of decentralization, the crypto industry still exhibits elements of centralization, emphasizing that finance economics play a role in this field.

While Gensler provided some insights into the SEC’s reaction to the Ripple decision and its implications for the cryptocurrency industry, he maintained that further evaluation and consideration are necessary before making any definitive statements or taking additional regulatory action.

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