United States Securities and Exchange Commission Chair Gary Gensler has commented publicly about the last week’s ruling on the agency’s suit against Ripple.
Gensler gave a talk on artificial intelligence at the National Press Club on July 17 and was asked about the ruling during the question and answer period afterward. Does the ruling affect his stance on cryptocurrency, and does it “inject urgency into the need for federal legislation to clarify regulatory oversight of this industry,” he was asked. Gensler replied:
“We are pleased from that decision recognizing the importance of protecting investors — institutional investors — and the court movement in regard to fair notice, and while disappointed [by] what they said about retail investors, we are still looking at it and assessing that opinion.”
Unsurprisingly, the topic also arose later in the day when Gensler spoke to Yahoo Finance. Gensler largely repeated himself, saying, “We are pleased that the court addressed […] that a token for institutional investors is a security […] disappointed in the other aspect about retail investors. We are still taking a look at that and considering it.”
A lot of crypto exchanges “feel like this was a real win for them” and are relisting XRP, interviewer Jennifer Schonberger told him. Could the decision set a precedent? “You’re asking good questions,” Gensler replied, before declining to answer, citing ongoing litigation.
JUST IN:— whalechart (@WhaleChart) July 17, 2023
SEC Chair Gary Gensler speaks about Ripple XRP ruling for first time, since last weeks court ruling pic.twitter.com/0lOzJEDs1e
But he did say that “these crypto platforms are commingling a number of services that […] we would not allow in any other parts of our capital markets.”
Does it make him reconsider writing customized rules for crypto, he was asked. “It’s too early. This was, like, three business days ago.” He added, “But I would note the agency has rules on the books right now […] about what it means to be a securities exchange.”
Gensler was asked about proposed Republican legislation that would create a decentralization test for crypto assets. He replied:
“I’m gonna save our comment on any draft legislation for members [of Congress] who ask us directly.”
Gensler said Satoshi Nakamoto (“whoever she was”) wrote a paper about moving value around on the internet without intermediaries, but the industry shows centralization in many places. “This is not a field that is immune to the economics of finance,” he concluded.