In a pointed critique of the U.S. Securities and Exchange Commission (SEC), Ripple CEO Brad Garlinghouse has accused the agency of hypocrisy, highlighting inconsistencies in its regulatory approach under the leadership of Gary Gensler. Garlinghouse’s comments come in the wake of the SEC’s unexpected decision to withdraw its request for a court ruling that certain tokens on Binance, one of the world’s largest cryptocurrency exchanges, are securities.
The SEC’s original lawsuit against Binance listed ten tokens, including Axie Infinity (AXS), The Sandbox (SAND), Cardano (ADA), and Solana (SOL), among others, as securities. However, the agency recently suggested that it no longer seeks to have these tokens legally classified as such, a move that has sparked widespread confusion and criticism within the crypto community.
Ripple CEO Reacts, Calls Out SEC Hypocrisy
Garlinghouse was quick to respond, labeling the SEC’s reversal as a clear example of its inconsistent application of regulatory standards. He argued that the agency’s approach under Gensler’s leadership is less about enforcing clear rules and more about advancing a political agenda. According to Garlinghouse, this lack of consistency is creating greater uncertainty across the cryptocurrency industry, undermining the very clarity that the SEC claims to champion.
The Ripple CEO’s frustration is rooted in the SEC’s ongoing litigation strategy. The agency has classified 68 different crypto assets as securities in various lawsuits, including those against Ripple and Coinbase. Notably, this is the first instance where the SEC has retracted its request to classify crypto tokens as securities—a courtesy that was not extended to Ripple’s XRP token. In Ripple’s case, the SEC pushed for a New York federal court to declare XRP a security, a request that the court ultimately denied.
SEC’s Inconsistent Litigation Strategy Raises Questions
The SEC’s about-face in the Binance lawsuit has raised eyebrows, particularly given the agency’s apparent determination to assert its authority over the cryptocurrency sector. By labeling numerous crypto assets as securities, the SEC aims to bring them under its regulatory jurisdiction. However, the recent decision to backtrack on its classification of the Binance tokens has led many to question the agency’s true motivations.
Also Read: SEC’s $2B Demand Faces Backlash: Ripple Awaits Verdict Amidst Settlement Rumors
Some crypto enthusiasts speculate that the SEC’s actions are part of a broader strategy to curry favor with crypto voters ahead of the upcoming U.S. elections. This theory suggests that the SEC’s shifting stance on crypto regulation may be influenced by political considerations rather than a straightforward interpretation of the law.
As the SEC continues to navigate the complexities of cryptocurrency regulation, Garlinghouse’s criticism highlights a growing rift between the agency and the industry it seeks to regulate. Whether the SEC will address these concerns or continue on its current path remains to be seen, but the debate over how to regulate the burgeoning crypto market is far from over.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
