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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler was slammed by the crypto community for stating: “We are not prosecutors of honest business, nor defenders of crookedness.” Many crypto advocates pushed back against Gensler, arguing that the SEC under his leadership has taken legal action against honest businesses, like Ripple and LBRY, while protecting crooks like former FTX CEO Sam Bankman-Fried (SBF).
Crypto Community Outraged at Gensler’s Remarks
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, drew heavy criticism from the crypto community on Thursday when he stated on social media platform X that the securities regulator does not prosecute honest businesses and does not defend individuals engaged in fraudulent activities. Gensler wrote:
As Joseph P. Kennedy, the first SEC Chair, once said: ‘We are not prosecutors of honest business, nor defenders of crookedness. We are partners of honest business & prosecutors of dishonesty. We shall not prejudge, but we shall investigate.’
Ripple’s chief legal officer, Stuart Alderoty, responded on X: “Fact check Gensler’s recent remarks. Ripple was sued, but never charged with ‘dishonesty.’ The failed case against it was prejudged, beginning with the ethically compromised Bill Hinman. Gensler has prejudged crypto and has filed suit against others w/o investigation.”
Cryptolaw wrote: “Gary Gensler has prosecuted honest businesses (ask the judges who agreed) and let crooked Sam Bankman-Fried (SBF) carry out a massive fraud right under the SEC’s nose. Resign.”
Replying to Gensler’s claim that the SEC is not a prosecutor of honest businesses, Shapeshift founder Eric Voorhees stressed: “You’ve literally prosecuted my honest businesses … twice now.”
Lawyer Bill Morgan opined:
The gall of the man to use this quote after the SEC on his watch sued a small honest company LBRY that was not accused of any fraud or dishonesty, threatened to bankrupt it and achieved that outcome. Gensler has no moral compass just a political agenda.
Gensler recently explained that he is taking a litigation-heavy strategy to regulate the crypto industry because “the field is so rife with hucksters and fraudsters and non-compliant parties.” This week, the securities regulator announced “another highly productive and impactful year for the SEC’s enforcement efforts relating to crypto asset securities.”
However, many feel that Gensler is working to consolidate his own power. U.S Representative Tom Emmer told the SEC chairman in a congressional hearing: “I’m convinced you are not an impartial regulator. Instead, it’s clear that you are working to consolidate your own power even though it means crushing opportunities for everyday Americans and frankly the financial future of this country.”