It’s been seven days since Judge Analisa Torres ruled partially in favor of Ripple, establishing that the court believes that secondary sales of XRP do not constitute an investment contract.
Much has happened in the cryptocurrency industry since then. The market exploded, led by XRP, of course, which soared by more than 70% on the news. A number of leading cryptocurrency exchanges re-listed the altcoin, causing a massive spike in open interest. In fact, the open interest for XRP futures hasn’t been higher in 2023.
But one thing that hasn’t happened yet is the US Securities and Exchange Commission filing an appeal. Will it? Meanwhile, some members of Congress are also not happy with how the SEC is approaching crypto regulations.
In a letter to Gary Gensler on July 19th, Congressman French Hill, Chairman of the Subcommittee on Digital Assets, Financial Technology, and Inclusion, as well as Congressman Dusty Johnson, Chairman of the Subcommittee on Commodity Markets, Digital Assets, and Rural Development, have laid out concerns on the way the SEC is approaching cryptocurrency regulation.
It outlines that Congress has so far worked to close the existing regulatory gaps, holding over 15 hearings on digital asset policy, introducing bills to address those gaps, as well as working to establish a regulatory regime for “digital commodities” over the past year.
In turn, the SEC is taking a different path.
While Congress works to close regulatory gaps, the SEC has opted to regulate by enforcement. […] This approach does not result in compliance and customer protection, but instead creates further confusion, as demonstrated by the recent summary judgment.
The Congressmen also add:
This approach does not protect the public. Legislation would do far more to prevent future collapses of digital asset firms than enforcement actions.
The letter calls for a “productive engagement” with the SEC on the matter while also claiming that a statutory framework would essentially create a process for firms to come into compliance.
All eyes are now on the US Securities and Exchange Commission and whether it will file an appeal against Judge Torress’ ruling from July 13th.
Chairman Gensler addressed the development at an event at the National Press Club on July 17th:
… while disappointed on what they (read: the court) said about retail investors, we’re still looking at it and assessing that opinion.
Still, he also said that the SEC will continue doing what they’ve been doing so far:
We’re going to continue to try to bring firms that may not be in compliance into compliance – without prejudging any of them – and try to ensure that we protect the investing public.
Recall also that recently, Gensler requested an additional $70 million to continue the fight against the “wild west of the crypto markets, rife with noncompliance.”
