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Ripple’s Battle with SEC Gets Personal as Garlinghouse Labels Gensler’s Actions as “Definition of Insanity”

Last Updated January 17, 2024 2:11 PM
Teuta Franjkovic
Last Updated January 17, 2024 2:11 PM

Key Takeaways

  • Brad Garlinghouse has labeled Gary Gensler a “political liability,” and says his actions are the “definition of insanity”.
  • Ripple’s CEO pointed to a series of regulatory measures taken by the SEC against the company.
  • Garlinghouse criticized Gensler’s actions and the resistance to crypto ETFs.

Ripple CEO Brad Garlinghouse launched a critique  at United States Securities and Exchange Commission (SEC) Chairman Gary Gensler.

Speaking at the World Economic Forum in Davos, Garlinghouse also discussed his perspective on the potential for ETFs linked to other cryptocurrencies.

Ripple CEO Slams Gensler, Calls for His Ouster

Garlinghouse labeled Gensler a “political liability ,” targeting him for his approach to crypto industry regulation. He pointed out the SEC’s prolonged delays in approving spot Bitcoin exchange-traded funds. Perhaps more pertinently, he mentioned the SEC’s high-profile lawsuits against companies, including Ripple, under Gensler’s leadership.

He said :

“I do think the chair of the SEC, Gary Gensler, is a political liability in the United States. And I think he’s not acting in the interests of the citizenry, he’s not acting in the interests of the long-term growth of the economy, and I don’t understand it. I think at some point there will be a new chair of the SEC, and I think that will be a good thing for the American people.”

The SEC did not immediately respond to a request for comment.

SEC’s Mixed Stance on Crypto: Approval and Concerns

Last week, the SEC marked a significant shift in the crypto market by approving several spot Bitcoin ETFs. However, SEC Gensler has consistently voiced apprehensions regarding the sanctioning of Bitcoin ETFs. He has pointed out the inherent risks, emphasizing that cryptocurrencies operate in unregulated markets and are prone to price manipulation. Nevertheless, Gensler voted to approve the ETFs.

In an unusual turn of events, just a day before the official approval of these Bitcoin ETFs, the SEC’s Twitter prematurely announced the authorization of such financial instruments. This announcement was later retracted and identified as false, following the SEC’s disclosure that its account had been hacked.

The decision to approve the ETFs came after a legal setback for the SEC. The commission faced a court defeat in a lawsuit filed by digital asset manager Grayscale, which aimed to overturn the SEC’s rejection of its Bitcoin ETF application.

Garlinghouse said :

“One of the definitions of insanity is doing the same thing over and over again and expecting a different outcome. I think Gary Gensler is doing the same thing over and over again, and he thinks that somehow he’s going to win in court. He has continued to lose in court.”

SEC’s Crackdown on Crypto Exchanges Escalates, Tensions Mount

The SEC’s recent legal action against major crypto exchanges reflects its ongoing efforts to regulate cryptocurrency. The ongoing lawsuits against Binance, Coinbase, and Kraken highlight the agency’s stance on unregistered securities.

In a separate case, Ripple is waging a protracted legal battle with the SEC, alleging its classification of XRP as a security is unwarranted. The dismissal of charges against Garlinghouse and fellow executive Chris Larsen in October provides a glimmer of hope for the firm.

These cases underscore growing tension between regulators and the cryptocurrency industry. Both parties are grappling with the complexities of digital assets and their implications for financial markets.

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