In an upcoming Congressional testimony, SEC Chairman Gary Gensler is expected to categorize the majority of crypto assets as securities. Ripple’s general counsel, Stuart Alderoty, has expressed concerns about Gensler’s approach, accusing him of intending to deceive Congress. Alderoty argues that a July decision from the Ripple case did not recognize secondary XRP sales as investment contracts, countering Gensler’s assertion.
Gensler’s pre-released testimony suggests that he firmly believes that most crypto assets meet the “investment contract” criterion set by securities law. He emphasizes that investors and issuers in the crypto asset securities markets deserve the same protections provided by securities laws. However, Gensler avoids commenting on active litigation and focuses on the applicability of existing rules and proposals to enhance safeguards in trading platforms and investment advisories dealing with crypto assets. It is noted that while Gensler implies the broad scope of securities laws over crypto tokens, he does not specifically judge any individual token.
Alderoty has been a vocal critic of Gensler’s views, previously likening him to a “flat-earther” for his alleged misunderstanding of the cryptocurrency industry. Alderoty also accuses Gensler of not fully understanding the law, citing misstatements made before the U.S. Senate Banking Committee regarding the criteria used by the Supreme Court to determine whether a token is an unregistered security.