SEC Chair Gensler Offers Mixed Response to Court Ruling on Ripple’s XRP Token
- Shams Ul Zoha
- July 18, 2023
- 2:11 pm
WHAT YOU SHOULD KNOW
- SEC Chair Gary Gensler expresses mixed response to court ruling on Ripple’s XRP token.
- The judge deemed XRP as a security for institutional investors, satisfying the SEC. However, Gensler expressed disappointment in aspects related to retail investors.
- He challenges the concept of decentralized finance (DeFi) and highlights the centralized nature of many projects.
SEC Chair Gary Gensler has expressed a mixed response to a court ruling that stated Ripple Labs’s XRP token is not necessarily a security. Gensler highlighted the ongoing litigation involving crypto platforms that potentially engage in trading against their customers and bundle various services. The court ruled that institutional investors purchased XRP with the expectation of profiting from Ripple’s efforts.
While Gensler expressed satisfaction with the court’s classification of XRP as a security for institutional investors, he expressed disappointment regarding aspects related to retail investors. He mentioned the SEC’s proposed rule changes during his tenure that apply to digital assets and emphasized the existing rules on securities exchanges, brokers, and investment advisers.
Gensler challenged the concept of decentralized finance (DeFi), arguing that it is quite centralized with key individuals holding titles like CEO or chief technology officer and a small number of people primarily holding the assets. Looking ahead, the SEC will handle spot Bitcoin ETF applications from financial institutions such as BlackRock and Fidelity in the coming months.
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