Ex-SEC Chair Criticizes Gensler’s Aggressive Crypto Lawsuits

In June, the U.S. Securities and Exchange Commission (SEC) filed lawsuits against major cryptocurrency exchanges Coinbase and Binance, marking an eventful month for the industry.

Gary Gensler, the current SEC Chair, has faced criticism for his regulatory actions. Former SEC Chairman Jay Clayton expressed his disapproval, citing Gensler’s statement that the SEC should be losing cases if they are not suing enough businesses. Clayton believes this approach signifies a shift in the perception of the government’s role and disagrees with it, stating that the SEC should only pursue cases it believes can withstand judicial scrutiny.

Gensler’s actions were criticized as political

Some have accused Gensler of behaving more like a politician than a regulator. It is worth noting that Jay Clayton himself initiated a lawsuit against Ripple just before leaving office in December 2020. The SEC has faced challenges in proving that Ripple sold XRP as unregistered securities during its 2013 Initial Coin Offering (ICO).

Following Clayton’s remarks, other players in the crypto industry have strengthened their defense. John Deaton, an attorney representing Ripple, highlighted a judge’s comment in the Ripple case, suggesting that SEC lawyers may not have faithfully adhered to the law.

Concerns have also been raised about the potential bias towards traditional financial players. As financial giant BlackRock filed for a spot Bitcoin Exchange-Traded Fund (ETF), market analysts questioned whether Gensler might show favoritism towards established institutions. The scrutiny lies in whether the SEC will provide concessions to these prominent players in the traditional finance sector.

Gary Gensler is scheduled to appear before the U.S. House Committee to discuss digital asset market structure. In response to Gensler’s actions, Congressman Warren Davidson from Ohio has filed for a restructuring of the agency and the removal of Gensler from his position.