Gary Gensler alluded that cryptocurrency operators tapping legal consultants could be doing so due to their supposedly unlawful securities offerings.
Gensler, Chairman of the U.S. Securities and Commission (SEC), reiterated skepticism regarding crypto service providers and their lack of compliance with existing financial laws overseeing the world’s largest capital market.
Furthermore, the SEC head drew parallels between attorneys reaching agreements with crypto entities and the business model employed by digital asset operators, arguing that the economic reality highlights how the “vast majority of crypto assets likely meet the investment contract test”, and are therefore securities.
Stuart Aldertory, Ripple’s chief legal officer, said Gensler’s comments are factually incorrect and that his underlying suggestion regarding crypto projects retaining legal advisors could be viewed as opposing rights enshrined in the U.S. Constitution.
“It’s a not-so-subtle and outrageous threat to everyone’s right to consult with counsel,” said Aldertory via a Nov. 6 post on X. Another lawyer echoed thoughts from the Ripple exec, adding that the SEC under Gensler has been adamant concerning its so-called anti-crypto stance.
The securities watchdog has fielded several litigations against crypto entities it views as part of a non-compliant digital asset industry rife with fraud, scams and bankruptcies. The court case SEC v Ripple began over the latter’s offering of its token XRP, and ended in a partial victory for the crypto company as the court ruled that certain sales did not qualify as securities.
The SEC agreed to a dismissal with prejudice in its case with Ripple, as crypto.news reported.
A trio of judges in Grayscale’s suit against the SEC also ordered Gensler’s commission to review the company’s bid to convert its Bitcoin trust known as GBTC into a spot Bitcoin ETF, a product the SEC is infamous for denying.