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The SEC’s crypto enforcement actions continue to raise dust.
Former US Securities and Exchange Commission enforcement chief Lisa Braganca has let slip that she is “puzzled” by the regulator’s delayed enforcement action against Gemini.
The former regulator and attorney disclosed this in a CNBC Squawk Box interview shared on Friday. According to Braganca, it is not clear why the SEC has known about this product for over a year, per recent statements from Gemini’s Tyler Winklevoss, and refused to intervene till now, despite its clear stance on products like the “Earn” program Gemini offered.
“The SEC has known about this product for a long time … …yet it allowed this to continue,” Braganca said. “The SEC has been clear for years that something like this earn program is a security so it’s puzzling why they didn’t come to a resolution of this a long time ago.”
"The @SECGov has known about this product for a long time…yet it allowed this to continue," says fmr. SEC Enforcement Chief Lisa Braganca on the SEC suing Genesis & @Gemini for selling unregistered securities. "It's puzzling why they didn't come to a conclusion months ago." pic.twitter.com/gxwXShbB2U
— Squawk Box (@SquawkCNBC) January 13, 2023
It comes as the SEC launched legal action against Genesis Trading and Gemini for engaging in the sale of unregistered securities on Thursday. As reported by The Crypto Basic, Gemini’s Tyler Winklevoss has described the charges as “counterproductive” and “politically motivated.”
The XRP Community Reacts
Notably, the former regulator’s comments did not go unnoticed by the crypto community, particularly XRP community members.
Attorney Jeremy Hogan, a pro-XRP lawyer who follows the case between Ripple and the SEC, wondered what Braganca’s reaction would be in the case of Ripple, which the SEC waited for 5 to 6 years to sue.
Former SEC Enforcement Chief Braganca is "puzzled" as to why the SEC knew about the Gemini lending program, but allowed it to continue for at least a year before telling it to stop.
I wonder what she'd say about the 5-6 years the SEC allowed Ripple to sell XRP? https://t.co/mjOiwc4HPU
— Jeremy Hogan (@attorneyjeremy1) January 13, 2023
Meanwhile, Attorney John Deaton, a friend of the court on behalf of XRP holders in the Ripple case, opined that the SEC waited till it could cause “maximum pain” to foster its agenda of regulating the crypto markets.
It’s easy, Gensler and the SEC waited until the moment they could cause maximum pain to help achieve the agenda being pursued.
— John E Deaton (@JohnEDeaton1) January 13, 2023
Notably, one user questioned why the SEC continued to stonewall Coinbase when it wanted to launch a similar product while needing over a year to investigate the Gemini Earn product and launch enforcement action. According to the XRP community member, it is evident that the SEC’s motives are unrelated to protecting retail investors.
@attorneyjeremy1 My question is, @coinbase was trying to offer the exact same product but was explicitly told not to BEFORE offering it. Nobody can sell me that the SEC needed a year to investigate @Gemini before they could file the lawsuit under the guise of “protecting retail”
— xrpbreezy (@xrpbreezy) January 13, 2023
It bears mentioning that Ripple is embroiled in a legal battle with the SEC that has spanned over 2 years. The regulator accuses Ripple and its executives of offering and selling an unregistered security, XRP.