Gary Gensler Refuses to Call XRP a Security in Congressional Hearing

Gensler did not give a yes or no answer to a question about whether XRP is a security.

For over two years, the SEC has been involved in an intense legal battle with Ripple over allegations that the blockchain company offered and sold unregistered security in the form of XRP.

The SEC has maintained that the leading blockchain company violated securities laws via its XRP sales and is asking the court to grant summary judgment in its favor. 

In a congressional hearing before the House Financial Services Committee’s yesterday, SEC Chair Gary Gensler faced a series of questions discussing the recent happenings in the cryptocurrency market. One of the most important questions thrown at the SEC was whether he believes XRP is a security. 

One of the essential questions thrown at the SEC boss was when Congressman Warren Davidson asked him whether he believes XRP is a security.

“Is XRP a security?” 

Interestingly, the SEC Chairman refused to provide a yes or no answer to the question. Instead, the SEC boss said the issue as to whether XRP is a security is currently in court, and there are active discussions on the matter. 

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“We are in court, and [there are] active discussion and litigation on that matter,” Gensler said. 

🚨BREAKING NEWS: Chair Gensler of #SEC says in “Active Discussions & Litigation” on status of #XRP… ARE SETTLEMENT DISCUSSIONS BEING DEVELOPED ? #ripple #xrpl #crypto #blockchain #xrparmy #XRPCommunity $XRP pic.twitter.com/rcE1fBe4wy

— Prosperity Fund (@prosperity_fund) April 18, 2023

Notably, Gensler also refused to provide a yes or no answer as to whether Ethereum (ETH) is a security. 

His response surprised many cryptocurrency enthusiasts, given that the SEC boss has maintained that XRP is a security. Gensler expressed the same view last year when he said Bitcoin is the only cryptocurrency he considers out of the SEC’s jurisdiction. 

Congressman Calls for Gensler’s Dismissal

Gensler’s adverse enforcement approach in the financial markets, especially the crypto sector, made many consider him unfit to rule over the agency’s affairs.

Interestingly, Congressman Warren Davidson shared the same sentiment as he introduced a bill proposing the restructuring of the SEC and the dismissal of Gensler. 

“Chairman Gensler, your record of failures to protect investors and abuses of power make it clear that we need to restructure the Securities and Exchange Commission,” said Davidson. 

After highlighting some of Gensler’s failures and abuses at the SEC, Congressman Davidson proposed legislation to correct these abuses by calling for the removal of the SEC chairman.

“To correct a long series of abuses, I’m introducing legislation that removes the chairman of the Securities and Exchange Commission and replaces the role with an executive director that reports to the board where all authority would reside,” Davidson remarked. 

🚨I’m calling to restructure the @SECGov and the removal of Chair @GaryGensler.

Watch my closing remarks from today’s hearing where I lay out the abuse of power and failure to protect investors that has occurred. pic.twitter.com/SNXio9Zbej

— Warren Davidson 🇺🇸 (@WarrenDavidson) April 18, 2023

It bears mentioning that Judge Analisa Torres is yet to rule on the Ripple vs. SEC lawsuit. The proposed legislation to have Gensler removed could be to Ripple’s advantage. 

With Congress shedding light on Gensler’s failure and abuses, Judge Torres will likely be pressured to rule in favor of Ripple.

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