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Influential figures in the crypto industry, including Elon Musk, have openly criticized the US Securities and Exchange Commission (SEC) for its regulatory tactics.
Musk, the CEO of Tesla and SpaceX, has been vocal about his disapproval of the SEC’s methods. In fact, he called the SEC a “weaponized institution.”
Musk insisted that SEC’s enforcement actions are more about exerting control than ensuring compliance with securities laws.
The SEC is just another weaponized institution doing political dirty work https://t.co/5w9ajcS6bf
— Elon Musk (@elonmusk) December 12, 2024
Musk And Ripple Legal Chief Are On The Same Page!
This criticism is not new. Musk has had a contentious relationship with the SEC following several high-profile run-ins related to his tweets and Tesla’s stock.
The agency has been accused of using its regulatory powers to target specific companies or individuals without providing clear guidelines on compliance. This perception of selective enforcement has fueled calls for reform within the SEC to ensure that its actions are guided by a commitment to fairness and transparency.
Ripple exposed the SEC’s lawless tactics early on. As the court said in our case: ‘The SEC is adopting its litigation positions to further its desired goal, not out of a faithful allegiance to the law.’ The question isn’t whether the SEC under Gensler is rogue—it is. The… https://t.co/4VToaTCeMT pic.twitter.com/Q6s3gTINwr
— Stuart Alderoty (@s_alderoty) December 14, 2024
Musk’s comments resonate with many in the crypto industry who feel that the SEC’s approach lacks clarity and consistency. Ripple has also been at the forefront of challenging the SEC’s regulatory approach.
The legal battle between Ripple and the SEC began when the agency filed a lawsuit against Ripple in December 2020, alleging that its sale of XRP tokens constituted an unregistered securities offering. In July 2023 Ripple claimed victory against SEC in the court.
Ripple’s Chief Legal Officer, Stuart Alderoty, has been particularly outspoken about what he describes as the SEC’s “lawless tactics” in its enforcement actions against Ripple.
Alderoty posted, “Ripple exposed the SEC’s lawless tactics early on. As the court said in our case: ‘The SEC is adopting its litigation positions to further its desired goal, not out of a faithful allegiance to the law.’ The question isn’t whether the SEC under Gensler is rogue—it is. The question is how we hold them accountable?”
Politician Vivek Ramaswamy chimed in and said, “Here’s the worst part: the SEC regularly loses case after case in federal court because they contort their rules in illegal & unconstitutional ways.”
Related: Coinbase To Cut Ties With Law Firms Linked To Former SEC Officials, Armstrong Promises
18 US States Sue SEC For Unlawful Regulations On Crypto Companies
Early this month, 18 US states have filed a lawsuit against the Securities and Exchange Commission (SEC) and members of the Biden administration.
The lawsuit, lodged in the US District Court for the Eastern District of Kentucky Frankfort Division, accuses the SEC of overstepping its authority by imposing unlawful regulations on cryptocurrency companies and their employees.
The lawsuit is spearheaded by Kentucky Attorney General Russell Coleman and includes attorneys general from Nebraska, Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, Oklahoma, Florida, and the DeFi Education Fund.
Recently, Coinbase CEO Brian Armstrong also announced that the crypto exchange will sever ties with law firms employing former SEC officials involved in what he claims was an effort to “unlawfully kill” the crypto industry.
President-elect Donald Trump has also pledged to overhaul the SEC’s leadership. He has criticized the agency’s regulatory stance and promised to replace Gensler.
Related: 18 States Sue Biden Administration Over SEC Crypto Actions
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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