The U.S. Securities and Exchange Commission (SEC) chair, Gary Gensler, is facing criticism from some SEC staff lawyers over his recent probes into the cryptocurrency sector. This could be good news for XRP holders, who are currently involved in a lawsuit with the SEC.
The SEC coming for crypto companies
The SEC has been actively pursuing litigation against various cryptocurrency firms, and its recent statement about its digital asset enforcement cases indicates that the agency is raising litigations that involve the applications of securities laws to digital assets. However, some SEC staff lawyers reportedly do not want to litigate all of these lawsuits, which could have significant implications for the XRP lawsuit.
XRP holders are represented in the lawsuit by attorney John Deaton, who claims to have been in talks with several cryptocurrency firms that are facing active litigation with the SEC. With some SEC staff lawyers opposed to Gensler’s crypto stance, Deaton believes that the SEC’s case against Ripple, the company behind XRP, may not be as strong as previously thought.
The XRP lawsuit centers around whether or not XRP is a security. Ripple argues that it is not, while the SEC claims that it is. If the SEC’s case is weakened, it could be a breakthrough for XRP holders.
SEC ramps up digital assets enforcement
The agency is continuing to ramp up its digital assets enforcement squad. In May 2022, the SEC announced that it was adding 20 people to its newly named Crypto Assets and Cyber Unit, nearly doubling the size of the operation. Now, the agency is planning to add even more staff to that unit, highlighting the priority that digital assets enforcement has become for the SEC.
Concerns among crypto lawyers
Many crypto lawyers are concerned that the SEC will eventually make an aggressive case against major trading platforms, claiming that they are running illegal, unregistered exchanges. The agency has accused Kraken of inappropriately offering securities in the form of its staking service, and there are fears that other trading platforms could be targeted in the future.
What does this mean for the crypto industry?
The clash between some SEC staff lawyers and Gensler’s crypto stance is an issue to watch closely, as it could have significant implications for the XRP lawsuit and the broader crypto industry. While the SEC’s enforcement division has proven to be successful in the past, the opposition to Gensler’s crypto stance could signal a shift in the agency’s approach to digital assets enforcement.