Ripple Tip: SEC shakedowns let consumers hold the bag

Reply comes as Ripple Labs and other critics believe SEC overstepped its mark on crypto space enforcement .

Ripple Labs General Counsel Stu Alderoty hit back at a recent opinion piece by Security and Exchange Commission Chairman Gary Gensler, saying the regulator's crypto market turmoil does not protect consumers.

In an Aug. 28 opinion piece in The Wall Street Journal (WSJ) titled “SEC wants to be America’s crypto cop,” Alderoty claimed the SEC is “pushing its follow-on regulators” instead of focusing on regulatory clarity for crypto.

He gave an example of BlockFi's recent "shakedown" by the SEC, which led to the company being "on the auction block" and two other similar companies "going to the belly", in arguing:

"Consumers weren't protected, they ended up with the bag."

The piece came in response to Gensler's August 19 article "SEC Treats Crypto Like Rest of Capital Markets" which also appeared on WSJ and defended the regulator's crackdown on the industry of cryptography.

Ripple's lawyer, however, argues that the SEC has not provided enough clarity on crypto regulation and instead declares itself as "the cop on the beat" for crypto.

It claims that the president is "dismissing fellow regulators" and "leading" President Biden's executive order that asks regulators to collaborate on crypto regulation.

The executive order Alderoty is referring to is “Ensuring Responsible Development of Digital Assets,” which was signed on March 9, 2022 to ensure that the SEC and the Commodity Future Trading Commission (CFTC) coordinate and collaborate in establishing a cryptographic regulatory framework.

However, Aldetory claims that the SEC has neither complied with the executive order nor provided “regulatory clarity for crypto” and is “instead protecting its turf at the expense of over 40 million Americans in the crypto economy.” ".

Gensler argued in his article that US federal security laws are designed to protect investors and that "there is no...