US Securities and Exchange Commission (SEC) Chairman Gary Gensler said the agency was “disappointed” by the court’s ruling in the Ripple case against retail investors, but “satisfied” with the verdict regarding institutional sales.
“We are still considering and evaluating this opinion,” the official stressed.
When asked about drafting new regulations for the crypto industry, Gensler said it was “too early,” citing the ongoing lawsuit. However, he recalled the already existing rules for securities exchanges.
The head of the SEC was also asked why the department prefers enforcement regulation instead of developing specific laws for the digital asset market. In response, Gensler said that the Commission did create “some rules”, including “comments and recommendations”
The regulator filed a lawsuit against Ripple in 2020, accusing the company of distributing unregistered securities in the form of platform native tokens.
On July 13, 2023, Judge Analisa Torres ruled that sales and other distributions of XRP do not constitute the offer and exercise of investment contracts.
However, the purchase of coins worth more than $700 million by large players still violated US laws. Torres granted the SEC’s motion for a summary judgment on the matter.
Now Ripple CEO Brad Garlinghouse and CEO Chris Larsen are awaiting a jury trial. It will decide whether top managers are responsible for the illegal sale of tokens to institutions.
Recall that former SEC lawyer John Reed Stark called the court’s verdict in the case against Ripple “shaky”. He did not rule out that the department will appeal the decision, and a higher authority will cancel the decisions related to “software” and “other sales.”
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