Ripple Vs SEC: SEC Chair Avoids Calling XRP a Security at Congress Hearing

On April 18, SEC Chair Gary Gensler faced a series of pressing inquiries at a House Financial Services Committee hearing, where discussions centered around recent developments in the cryptocurrency market. Among the crucial topics, the status of XRP as a security took the spotlight.

Congressman’s Curiosity on XRP’s Status

Congressman Warren Davidson posed a direct question to the SEC head, inquiring whether Gensler considered XRP to be a security. However, Gensler carefully evaded giving a definitive response. He pointed out that the matter is currently under litigation, with ongoing debates surrounding XRP’s classification.

Similarly, Gensler declined to state explicitly if Ethereum (ETH) should be considered a security too, making it clear that he is maintaining a cautious approach. Notably, Gensler has sued Ripple, the company that issues XRP, over the selling of unregistered security in form of XRP itself.

Legislation to Restructure the SEC

Following the congressional hearing, Davidson introduced a bill aimed at removing the SEC Chair from his position. The congressman highlighted Gensler’s alleged “failure to protect investors and abuses of power” as the primary reasons for initiating a restructuring of the regulatory body.

In his closing remarks, Davidson proposed legislation to replace the chairman’s role with an executive director position, which would report directly to the board. Furthermore, the legislation aims to prevent former SEC chairs from being considered for the new role.

Addressing a History of Abuses

Davidson announced his intention to introduce the legislation via a tweet too. He emphasized that the bill’s objective was to rectify a series of abuses under Gensler’s leadership. The proposed changes would signal a complete overhaul of the regulator’s structure.

The highly publicized hearing brought Gensler’s controversial crypto regulation policies into the limelight. During his time as SEC Chair, Gensler has overseen some of the most significant fraud cases within the industry. Critics argue that he has consistently advocated for ambiguous regulatory action—especially toward the crypto industry—prioritizing enforcement over constructive dialogue and collaboration with the sector.