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The SEC’s shakedowns have left consumers holding the bag

The SEC's shakedowns have left consumers holding the bag.

After hearing the latest opinion of Securities and Exchange Commission chairman Gary Gensler, Ripple Labs General Stu Alderoty responded by saying that customers are left carrying the bag as a result of the SEC’s shakedowns. He said that the shakedowns of the cryptocurrency sector by the regulator aren’t doing anything to protect investors.

In an editorial piece for the WSJ titled “The SEC Wants to Be America’s Crypto Cop” published on August 28, Alderoty claimed that the SEC is more concerned in “pushing aside his follow regulators” than with providing regulatory stability for cryptocurrencies.

He said that consumers are left carrying the bag after the SEC’s recent “shakedown” of BlockFi, which put the company “on the auction block” and caused two similar companies to go “belly up.” Here is the complete original statement:

Customers “weren’t shielded, and they were left holding the bag.”

The column is a rebuttal to an article by Gensler, “The SEC Treats Crypto Like the Rest of the Capital Markets,” published on WSJ and Medium on August 19. Gensler used this article to defend the regulator’s crackdown on the cryptocurrency industry.

In contrast, the Ripple counsel asserts that the SEC has not provided adequate clarification on crypto regulation and labels itself “the cop on the beat” for crypto.

When it comes to crypto regulation, he thinks the chairman is “pushing aside his other regulators” and “front-running” President Biden’s executive order asking for collaboration from regulators.

Alderoty alludes to the March 9, 2022, “Ensuring Responsible Development on Digital Assets” executive order, which mandates coordination and collaboration between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the development of crypto regulatory guidelines.

In Aldetory’s view, the SEC has ignored the executive order and failed to provide “regulatory certainty for crypto,” instead opting to “preserve its territory at the expense of more than 40 million Americans in the crypto economy.”

Gensler argued in his post that the United States‘ federal security laws were established to protect investors and that “there’s no reason to treat the crypto market differently from the rest of the capital markets simply because it employs a different technology.”

In an opinion post published on August 28 for Forbes, Roslyn Layton argued that the SEC’s plan to double the size of its Crypto Assets and Cyber Unit and its “regulation by enforcement” policy showed the agency’s bias against crypto.

U.S. Attorney John Deaton made similar accusations against Gensler and the SEC earlier this month, saying that the two organizations were unfairly targeting cryptocurrencies and going beyond their current regulatory powers.

It does not take a constitutional law expert to grasp that the SEC has little authority over the cryptocurrency business. Absent congressional action, the Commodity Futures Trading Commission is the primary regulator of non-traditional securities.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.