SEC's Disagreement Over Cryptocurrency Regulation: What next for XRP lawsuit?

    Simar Marwaha
    Simar Marwaha
    Published on March 02, 2023 04:38 PM

    The SEC's disagreement over crypto regulation may impact the XRP case and the future of the cryptocurrency industry. Let's find out!

    SEC's Disagreement Over Cryptocurrency Regulation
    Source: Bloomberg

    The Securities and Exchange Commission (SEC) in the United States is now engaged in a heated internal dispute between its employees and its recently appointed chairman, Gary Gensler.

    The disagreement surfaces as the organization tries to decide how to regulate cryptocurrencies. Recent reports claim that staff members disagree with Gensler's positive stance on cryptocurrencies, which may have an effect on the XRP case.

    Regulators all across the globe are rethinking their positions on digital currencies as a result of the rising popularity of cryptocurrencies. Particularly the US Securities and Exchange Commission (SEC) has been debating how to regulate the cryptocurrency market, with Gary Gensler, its recently appointed chairman, and other staff members having opposing viewpoints.

    Staff members at the authority have recently raised worries about investor safety and Gensler's positive stance on cryptocurrencies, which has exacerbated the internal debate inside the organization. The fate of the ongoing XRP case hangs in the balance since the regulatory environment is still hazy, with possible repercussions for the whole crypto industry. Let us first discuss the implications of the XRP lawsuit.

    Implications of XRP Lawsuit

    The ongoing XRP case may be significantly impacted by the internal disagreement inside the SEC on cryptocurrency regulation. The SEC sued Ripple Labs, the firm behind XRP, in December 2020, claiming that it had undertaken an unregistered security offering for $1.3 billion.

    XRP's value fell due to the litigation, and it was later removed from numerous significant exchanges. Ripple has refuted the accusations and charged the institution with regulatory overreach.

    There have been hints in recent weeks that the SEC could be getting ready to resolve the XRP litigation. Ripple's lawyers stated to the court that they had "constructive" negotiations with the SEC and were optimistic that a resolution could be achieved.

    Yet, the internal dissent within the SEC on cryptocurrency regulation may have an influence on how the XRP lawsuit turns out. A more favourable regulatory environment for digital currencies may result from Gensler's optimistic stance on cryptocurrencies, which may benefit Ripple's position.

    On the opposing hand, if the SEC staff members' worries about the dangers of cryptocurrencies are given more weight, it may result in stricter regulatory framework, which might be detrimental to Ripple.

    Also read: All you need to know about the SEC Vs. Ripple lawsuit

    SEC's Refute over Cryptocurrency Regulation

    Internal strife at the SEC started when Gary Gensler, who had previously led the Commodities Futures Trading Commission (CFTC), was chosen as the organization's chairman by the Biden administration in April 2021. Gensler, a blockchain and cryptocurrency enthusiast, has advocated for regulatory clarity in the cryptocurrency field and has been outspoken about his support for digital currencies.

    Staff members, who think that investing in cryptocurrencies comes with major dangers, disagree with Gensler's upbeat stance on cryptocurrencies. The absence of investor safety in the cryptocurrency market worries the SEC staff, who recently brought up the industry's significant volatility and fraud risk.

    Despite various reservations, Gensler is nonetheless upbeat about the promise of cryptocurrencies and has stressed the significance of developing a legal framework that fosters innovation while simultaneously safeguarding investors.

    Gensler has also stated that he intends to collaborate closely with Congress to create precise regulations for the cryptocurrency industry.