Ripple CEO Brad Garlinghouse has strongly criticized the US Securities and Exchange Commission (SEC) chair Gary Gensler, accusing him of “stunning hypocrisy” within the crypto industry. Garlinghouse expressed his disapproval of Gensler’s recent comments about noncompliance in the crypto space, highlighting the impact on individuals and the challenges faced by legitimate actors.
“There is a lot of noncompliance in the crypto space,” Gensler said.
However, Garlinghouse pointed out the relationship between Gensler and fraudulent activities, stating that Gensler had “cozied up to the biggest fraud in recent memory” and criticized him for harming consumers while maintaining close ties with Wall Street.
Garlinghouse previously compared Gensler’s approach to that of an autocrat and urged Congress to pay attention to his conduct. This criticism from Garlinghouse has garnered support from the broader crypto community, who view Gensler as a primary adversary to the emerging industry.
Gensler’s Strict Regulatory Approach and Criticisms
Many stakeholders within the crypto industry have raised concerns about Gensler’s strict regulatory approach, arguing that the SEC is applying outdated securities laws to innovative crypto finance models like decentralized autonomous organizations (DAOs) and decentralized finance (DeFi) protocols. Notable figures, including Dogecoin founder Billy Markus, have echoed these concerns, pointing out the lack of clear rules for this evolving sector.
Despite the criticisms, Gensler has consistently defended his stance, asserting that the existing securities laws are sufficient for the crypto industry. Under Gensler’s leadership, the SEC has taken legal action against major crypto firms like Coinbase and Binance, accusing them of securities law violations. The regulator has also categorized cryptocurrencies such as Solana, Cardano, and Polygon as crypto securities tokens in numerous legal actions.
Last September, Gensler acknowledged that although not all tokens can be pre-judged, a significant portion of the crypto industry falls under securities laws but remains non-compliant. He emphasized that crypto has had a destructive impact on investors who have suffered losses and warned that these problems could potentially extend beyond the crypto industry and affect the broader financial system.
More recently, Gensler issued another warning about the prevalence of fraud in the crypto space, identifying the presence of multiple “notorious fraudsters.” He highlighted that it’s not just about one circumstance or individual, but rather the existence of several notorious fraudsters within the industry.
