Key Insights
- Gary Gensler stated that the SEC is disappointed with the way the lawsuit ended in the case against Ripple Labs.
- He also confirmed the fact that the regulator will continue to study the case.
- During the proceedings, the sale of XRP on this market was declared illegal.
US Securities and Exchange Commission (SEC) Chairman Gary Gensler has expressed his disappointment with how the Ripple Labs trial ended. According to him, the regulator will continue to study this issue:
We are pleased with the decision as it highlights the importance of protecting institutional investors. But at the same time, we are disappointed with the outcome of the case in the context of retail investors. I can say that the decision of the court is still under close scrutiny. We are carefully assessing it.
In his statement, the official noted the SEC’s commitment to maintaining order in the cryptocurrency market. According to Gensler, the regulator will continue to try to bring those firms that violate industry laws into compliance with the rules. He also stressed that the SEC’s efforts are aimed at ensuring the protection of investors.
This is Gary Gensler’s first comment since the conclusion of the lawsuit against Ripple Labs.
Last week, the company secured a partial victory as the retail trade of XRP was not deemed a violation of the Securities Law.
Continuation of the story with Ripple Labs
According to a recent report by Fox Business, the US regulator has expressed its satisfaction with certain aspects of the final decision of the case. The court recognized XRP tokens as investment contracts under specific conditions, which the SEC views as a violation of the law.
The SEC’s stance relies on the “Howey test,” a crucial factor in determining whether certain cryptocurrencies should be classified as securities. However, the court dismissed Ripple Labs’ approach, which was based on the company’s own methodology.
While the SEC is content with some elements of the decision, it hasn’t ruled out the possibility of an appeal. Gensler partially confirmed this in his speech.
It is worth noting that Judge Analysis Torres referred the case to her colleague Sarah Netburn. The latter has repeatedly spoken out in support of the company, according to Cointelegraph. The publication states that this could significantly complicate further litigation for the SEC.
What else was Gensler talking about?
As part of his speech, the head of the department touched on several important topics, including AI. In his opinion, this technology, as well as derivative products, can increase financial instability. He also instructed SEC staff to work out possible rules for the AI sector, although this initiative is not of a regulatory nature.
How will the SEC’s expressed disappointment with the outcome of the Ripple Labs trial impact their future approach to cryptocurrency regulation and investor protection? Let us know in the comments.
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