On July 17, Gary Gensler said he was “disappointed” with the judge’s ruling that Ripple’s XRP token was not a security when it was sold to retail investors on exchanges.
The ruling was celebrated as good news for the wider crypto industry and retail investors, but Gensler doesn’t agree.
🚨BREAKING: @GaryGensler addresses the @Ripple Summary Judgment decision for the first time since last week’s ruling:
“…And while we’re disappointed on what they said about retail investors, we’re still looking at it, and assessing that.”
— Eleanor Terrett (@EleanorTerrett) July 17, 2023
However, Gensler said he was “pleased” about the decision recognizing the “protection of institutional investors” before adding:
“While disappointed on what they said about retail investors, we’re still looking at it and assessing that opinion.”
The speech was stuttered, and Gensler appeared simply lost for words at times. The fragmented comments came at an event at the National Press Club on July 17.
Nevertheless, he added that the war on crypto will continue despite this loss.
“We’re going to continue to try to bring firms that may not be in compliance into compliance — without prejudging any one of them — and try to ensure that we protect the investing public,”
The ruling that XRP sales to retail traders did not constitute securities transactions is good news for other crypto assets that Gensler and crew alleged were investment contracts.
In 2020, the SEC accused Ripple of illegally raising $1.3 billion through an unregistered securities sale of XRP. However, Judge Analisa Torres of the Southern District of New York ruled that XRP was not a security in the secondary market sale.
She said Ripple’s algorithmic sales for XRP on exchanges and trading platforms was not a securities offering (which is similar to a stock offering). Buyers “could not have known if their payments of money went to Ripple,” she said.
XRP prices skyrocketed more than 80% late last week but have settled in the mid-$0.70 area. The token has lost 2.5% on the day, however, in a fall to $0.738 at the time of writing.
XRP hit its highest level since March 2022 but remains down 78% from its 2018 all-time high of $3.40.
The ruling also boosted several other crypto assets, including Cardano (ADA), Solana (SOL), Polygon (MATIC), and Stellar Lumens (XLM). All of these have also been labeled securities by the SEC.
