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  • Writer's pictureJamal Saafir

SEC’s Chairman Gensler Not Satisfied With Ripple Labs XRP Ruling

Updated: Aug 7, 2023

According to a report from, United States Securities and Exchange Commission (SEC) Chair Gary Gensler is reportedly “disappointed” with the SEC v. Ripple ruling that came down on July 13th. In the words of Ripple Lab’s chief legal officer Stuart Alderoty, the ruling supports that “XRP is not a security, sales on exchanges are not securities, sales by executives are not securities, and other XRP distributions to developers, charities, and employees are not securities.”

At the National Press Club Luncheon on July 17th, in response to the ruling, Gensler stated, “we are pleased from that decision, recognizing the importance of protecting investors —- institutional investors —- and in that —-- the court’s movement with regard to fair notice, while disappointed on what they said about retail investors. We’re still looking at it and assessing that opinion.”

Gensler also repeated the SEC’s devotion to imposing regulation on the cryptocurrency industry and guaranteeing compliance among crypto firms. Gensler opened this portion of the discussion stating and repeating throughout that protection of the investing public is the main concern and objective of the SEC in regards to cryptocurrency.

When asked, “What's the next frontier for the SEC crypto enforcement push?”

Gensler replied, “Our role at the SEC is again protecting the markets, the investing public, the capital formation and ensuring for compliance with the laws that are on the books (as) Congress passed them. That’s what we’re doing.”

“We’re going to continue to try to bring firms that may not be in compliance into compliance without prejudging any one of em’ and trying to ensure that we protect the investing public.”

“The basic bargain that was laid out for you, the listening public, was that you get to decide what investments you make, but the folks that are raising money from you —- that you get full fair and truthful disclosure from them.” —- “Without that disclosure, how can you be ensured as to what risk you are taking?”

“And that the platforms, the intermediaries that are transacting in securities have basic protections against conflicts, against fraud, against manipulation.”

SEC Chairman Gensler’s comments during the National Press Club Luncheon on July 17th, can be seen and heard here:

*The cryptocurrency portion of the discussion is at the 40:54 mark of the video.

Per a report from, former United States Securities and Exchange Commission official John Reed Stark shared his thoughts on the recent SEC v. Ripple ruling and it looked pretty grim. With a 15 year tenure as an SEC enforcement attorney, his words may carry some validity on the matter. Stark is quoted to have taken to his Linkedin page on Friday July 14th, stating, “The Ripple ruling is troubling on multiple fronts.” He further added, “IMHO, the decision resides on shaky ground, is likely (and ripe) for appeal, will likely result in reversal and is not necessarily a cause for celebration.”

“The Ripple decision grants to the institutional investor full SEC protection and all remedies that go along with SEC violations, including rescission, fines, penalties, etc. However, the retail investor is not granted any SEC protection at all. This seems backwards to say the least.”

“My take is that the SEC will appeal the Ripple decision to the 2nd Circuit and the 2nd Circuit will overturn the district court’s rulings related to ‘programmatic’ and ‘other sales’.”

According to a press release from the Financial Services Committee on July 14th, Chairman of the House Financial Services Committee, Patrick McHenry and Chairman of the House Agriculture Committee, Glenn “GT” Thompson commented regarding the SEC v. Ripple ruling and made clear their desire for legislation, regulation, and protection of the crypto market as a whole:

“This decision underscores the need for Congress to provide clear rules of the road for the digital asset ecosystem—it’s misguided to think otherwise," said the lawmakers. "The ruling gives large institutional investors greater protections than everyday Americans. Outcomes like this are what happens when regulators force courts to make policy instead of Congress. Our comprehensive market structure legislation will give all investors, customers, and market participants the same longstanding protections found in traditional financial markets.

“The decision also recognizes what Republicans have said all along: there is a limit to the SEC’s reach. According to the court, digital assets may not be inherently securities, but can be offered as part of an investment contract in certain circumstances, which our legislation acknowledges. Gary Gensler’s SEC cannot continue to pursue its regulation by enforcement approach, which only harms investors and creates uncertainty.

“Our digital asset market structure bill is essential to filling the regulatory gaps highlighted in this decision. We remain committed to ensuring all Americans have robust protections in the digital asset marketplace. We look forward to advancing this legislation out of our respective committees this month.”

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