Gary Gensler under fire. Ripple’s General Counsel Stuart Alderoty indicates that the SEC chairman may have a problem with his knowledge of the law.
Controversy over Gary Gensler’s statements
There has long been a legal dispute over which cryptocurrencies in the United States should qualify as securities and which should not. Discussions and hypotheses in this aspect have indeed emerged. One side of the conflict is the Securities and Exchange Commission (SEC), headed by its chairman Gary Gensler.
Meanwhile, the SEC head is facing very strong resistance from the cryptocurrency community. One person who has been particularly negative about Gensler is Ripple’s general counsel, Stuart Alderoty. In a recent statement, he referred to Gensler’s misinterpretation of the U.S. Supreme Court test. Alderoty shared his criticism via Twitter:
“At today’s Senate Banking Committee hearings, Chairman Gensler misrepresented the Supreme Court test to determine what is and is not a security. Was this intentional, or does he really not know the law? Which is worse?”
The cryptocurrency community reacts
The question, although it seemed rhetorical, resulted in a wide-ranging discussion. It involved, among others, attorney James K. Filan, who said rather briefly that “there are no accidents.”
LBRY, which is currently in a legal battle with the Securities and Exchange Commission, also offered its opinion. Its representatives, in response to Aleroty’s post, wrote:
“Your tact is admirable, but we all know how it is.”
The issue was also addressed by Congressman Bill Huizenga, who exhorted:
“The President should not simply choose when and where to testify. I urge my colleagues in the House to immediately schedule a hearing with Gary Gensler and the full SEC so that we can discuss issues that affect the hardworking Americans who participate in our markets.”
Is bitcoin alone not a security?
Aleroty’s opinion came just after the SEC chief defended his agency before the US Senate Banking Committee. During the hearing, Gensler pointed out that, except for Bitcoin, all cryptocurrencies fall under the definition of a security, which forces them to register accordingly.
Gesler’s opinion is disagreed with by Republican Pat Toomey, who explains:
“Cryptocurrency tokens have varying degrees of decentralization and usually have no financial claim on the issuer. These are very serious and important differences from traditional securities and deserve a clearly defined and adapted regulatory framework.”