Stuart Alderoty, Ripple’s Chief Legal Officer, has said that Gary Gensler needs to recuse himself from future decision-making exercises touching on the classification of cryptocurrencies.
Today, the lawyer suggested that Gensler future decisions were likely to be biased, referencing a recent interview in which the U.S. Securities and Exchange Commission chair said that every crypto asset except Bitcoin was a security.
“Chair Gensler has again proclaimed that every cryptocurrency, except BTC, is an unregistered security. He now must recuse himself from voting on any enforcement case that raises that issue since he has prejudged the outcome,” tweeted Stuart.
In a wide-ranging Feb. 23 New York Magazine interview discussing the crypto sector, Gensler indirectly claimed that all other cryptos were securities because “there’s a group in the middle and the public is anticipating profits based on that group” which, according to him, was not the case with Bitcoin. As such, his words were taken to suggest that all crypto-assets apart from Bitcoin fell under the remit of the SEC, attracting widespread criticism from the crypto community.
Jake Chervinsky, a lawyer and policy lead at the Blockchain Association, argued in a tweet that Gensler “may have prejudged that every digital asset aside from bitcoin is a security”, and thus, the SEC lacked the authority to regulate all cryptocurrencies until the SEC proves its case in court. The lawyer further noted that Gensler’s “opinion is not the law” despite the commissioner’s asserted authority over the cryptocurrency industry.
Meanwhile, as the years-long lawsuit against Ripple inches closer to an end, the community continues to wait for the court to decide whether XRP is a security. Notably, while the overall outcome of the case remains a matter of speculation, several court rulings on issues with nearly similar facts have been guiding as to what could happen.
One case was when SEC sued blockchain-based sharing platform LBRY in March 2021 for offering its LBC tokens without registering them with the agency. However, a court of appeal judge recently ruled that LBC tokens are only considered securities when sold in the primary sale. For many, Ripple is likely to get a favourable ruling should it convince the court it never formally held an ICO, similar to the LBRY situation.
A win by Ripple could see XRP relisted on crypto exchanges such as Coinbase and Binance.US, boosting the coin’s price considerably.