Stuart Alderoty, Ripple’s Chief Legal Officer boasting over three decades of legal prowess, recently took to Twitter to criticize the evasiveness of SEC Chairman Gary Gensler, during a hearing at the House Financial Services Committee. The heat intensified as Rep. Ritchie Torres questioned Gensler, prompting Alderoty to remark, “Gensler Didn’t Know What Hit Him Until It Was Too Late.”
The core of the criticism revolved around Gensler’s seeming inability to directly answer Rep. Torres’s fundamental questions, like the necessity of a contract in an investment agreement. Torres labeled Gensler’s evasive responses as “deafening and damning.” Instead, Gensler seemed more inclined to criticize the cryptocurrency sector and how certain crypto firms manage their customers’ assets.
Alderoty was taken aback by Gensler’s open amusement about his wealth, sparking indignation within the XRP community. Some questioned whether Gensler’s priorities lay more in amassing personal wealth than genuinely serving the public.
It’s essential to note that Gensler’s manner of answering is typical in such settings. This style, often dubbed “Fed Speak,” aims to furnish vague statements that appear substantive but are evasive. Despite Rep. Torres’s evident frustration and calls for clarity, Gensler maintained that his responses were “consistent.”
Recent events have positioned Gensler and the SEC under intense scrutiny, with critiques emerging from various quarters, including politicians, lawyers, and even SEC commissioners, and this month witnessed a barrage of lawsuits against the SEC, with six significant financial trade associations challenging the new Private Funds Adviser Rule as capricious.
Alderoty joins the chorus of legal professionals expressing concern over the SEC’s recent directions. John Deaton, a lawyer in Ripple’s corner, declared the SEC the primary threat to retail investors, especially following the SEC’s challenge to the partnership between Coinbase and the renowned Celsius Network.
In a climate of increasing regulatory scrutiny on cryptocurrencies, such hearings and the subsequent fallout underscore the ongoing tension between regulators and the burgeoning crypto industry.