Famous analyst Hassan Tyler rebukes SEC chair Gary Gensler’s regulatory approach, saying the commission’s boss did not learn anything from its defeat against XRP.
Tyler’s comment was also highlighted yesterday by CryptoLaw, a U.S. legal and regulatory news platform.
"@GaryGensler seems to refuse to learn anything from Clayton’s market-confusing actions, the conflicts of interest around Hinman, the failure to scrutinize @SBF_FTX or the failed case against $XRP." Hassan Tyler in @rc_markets 👇https://t.co/57BJJc5jg4
— CryptoLaw (@CryptoLawUS) November 30, 2023
The analyst pointed out that despite the SEC suffering a major defeat in its case against Ripple, Gensler has refused to follow the law regarding crypto regulation.
Court Rejects SEC and Gensler Claims
It bears mentioning that the Ripple case was filed by former SEC chair Jay Clayton on his last day in office, on December 22, 2020. The SEC claimed that Ripple raised $1.3 billion by selling XRP to investors as an unregistered security.
With Gensler appointed SEC chair the following year, he took an enforcement-centric approach towards regulating cryptos. This prompted him to label tokens other than Bitcoin as securities.
Interestingly, Gensler’s claim about altcoins was dealt a major blow in July after the United States District Court for the Southern District of New York (SDNY) ruled that XRP in itself is not an investment contract.
The court also ruled that most of Ripple’s XRP sales, including programmatic transactions, did not violate the law, contrary to the SEC’s initial claim.
SEC’s Refusal to Follow the Law Has Consequences
Based on its defeat against Ripple, one would expect Gensler and the SEC to follow the law and avoid regulating cryptos using enforcement actions.
However, under Gensler’s leadership, the SEC has continued to stick with the enforcement-styled regulation. Last month, the SEC charged Kraken Exchange with violating securities laws.
In the Kraken case, the SEC listed 16 cryptocurrencies it considered to be securities, including ADA, SOL, MATIC, ALGO, and NEAR.
According to Tyler, the SEC’s refusal to follow the law has real-world consequences.
“The accumulating failures have real-world consequences for markets and investors, along with the credibility of the U.S. as a destination for innovation capital,” Tyler said.
The analyst asserted that if doubts surrounding the SEC’s credibility are not addressed, millions of U.S. investors will be harmed. At the same time, conflicted SEC officials would continue to pick winners and losers.
In addition, Tyler emphasized the need for the SEC to change its crypto regulatory approach. Per Tyler, if the relevant authorities do not change the SEC’s leadership, Congress needs to get involved by imposing a clear crypto regulatory framework on the SEC, highlighting the agency’s responsibilities within the emerging market.