Attorneys Criticize SEC Chair Following Comments Relating To Ripple Case

In a recent development, pro-XRP legal experts Bill Morgan and John Deaton have taken a swipe at the US Securities and Exchange Commission’s (SEC) Chair Gary Gensler following his recent comments, which show his stance on the Ripple Case.

Ripple Case: Gensler a “Megalomaniac”

In a tweet shared on his X (formerly Twitter) platform, Deaton criticized Gensler’s supposed disregard for the court, including the Supreme Court. He says people like Gensler “are inherently arrogant” and think “they are above the law.” He further labeled the SEC Chair a “real life example of a megalomaniac.”

His tweet was in response to an interview where Gensler was quizzed as to whether or not anything “any court” will say will change his perception of the crypto space and, by extension, cryptocurrencies. Instead of answering the question, Gensler seemed to deflect and stated that he wished a court could say something to speed up compliance in the industry.

His comments about the court come at a time when the SEC is involved in an ongoing legal battle against Ripple, a case that could determine whether crypto tokens are indeed securities.

Going by this, it would seem that Gensler is hell-bent on getting a court decision that will support his notion that cryptocurrencies are securities and should be guided by the securities laws rather than being guided by the court on whether or not cryptocurrencies fall under the SEC’s purview in the first place. 

Meanwhile, Bill Morgan further dissected Gensler’s comments. He stated that Gensler meant that he wished the Commission had “won the part of the Ripple case that matters most” and that since they didn’t, he is hoping that an Appeal court can reverse Judge Analisa Torres’ ruling. 

He joked that Genlser would be hoping this happens so they can have their own party in New York, most likely in reference to Ripple’s announcement that it would have a party in New York on September 29 to celebrate its victory against the SEC. 

Securities Laws Should Apply To Crypto Industry

In that same interview, Gensler mentioned that securities laws should apply to “crypto security tokens.” According to him, there is nothing “incompatible” between those tokens and the securities laws, suggesting that there is no reason why they shouldn’t be tagged as securities.

He further stated that investors have much to gain from these tokens being regulated by the securities laws, including the fact they will be protected from fraud and manipulation. He alluded to the fact that many, hoping for a better future, have lost their money to crypto investments. 

The SEC and Gensler hope to use the Ripple case to prove that crypto tokens are indeed securities and should be guided by the securities laws. Their interlocutory appeal against Judge Torres’ ruling is focused on the Judge’s decision on Ripple’s programmatic sales and other distributions, as she stated that they didn’t constitute investment contracts.

If the appeal goes in the SEC’s favor, the Commission will gain momentum to forge ahead in its enforcement actions. It will also provide a leeway for it to enforce actions against all crypto exchanges for operating as unregistered securities exchanges, just like it already did with Binance and Coinbase.