When we think about the current legal struggle between the SEC and XRP, both sides have learned that XRP is defense and not (according to Ripple Labs).
This does not appear to be a straightforward case of ‘Black/White,’ but it is apparent that the crypto-regulation needs to be implemented urgently, as SEC Commissioner Hester Peirce has constantly repeated. In a recent interview, newly named SEC Chair Gary Gensler also discussed crypto regulations.
He spoke to the CNBC Squawk Box and said that
“I think to the extent something is security the SEC has a lot of authority and a lot of crypto tokens — I won’t call them cryptocurrencies for this moment — are indeed securities. The prior Chair indicated that. The prior SEC brought numerous enforcement actions to sort of bring some of those security or investment contract tokens into the rules, but there are some like Bitcoin.
This may indicate a potential understanding – not only is XRP named as a security, but also a whole series of ‘crypto tokens’ which are considered securities.
In several times, Ripple CEO, Brad Garlinghouse, pointed out SEC when it was unclear. His struggle with US regulatory guards continues. “SEC said XRP is a defense, he said in a recent interview. And now we’re in a judicial debate now. So far, I have been feeling positive about it, but definitely it’s stressful.”
Gensler then addressed the Bitcoin and crypto markets, in general. he added:
“If I can just focus on that — and that’s about half of this two trillion dollar asset class right now — it’s a digital scarce store of value, but highly volatile, and there are investors that want to trade that and trade that for its volatility, in some cases just for its lower correlation with other markets.”
Gensler further commented on the need for investor protection. He said:
“So if an investor wants to trade on that Bitcoin, understanding it’s highly volatile, highly speculative, but if they want to trade on that, we haven’t placed some investor protection, and that’s what I was saying. I think there is a gap in our system right now.“