The United States Securities and Exchange Commission (SEC) recently suffered a significant blow as its attempt to impose legislation to restrict the cryptocurrency market was rejected by the United States Senate. Stuart Alderoty, General Counsel of Ripple, expressed his delight and labeled this event as a significant milestone for the cryptocurrency sector.
In March 2022, the SEC introduced a proposal known as Staff Accounting Bulletin No. 121 (SAB121), which aimed to require financial institutions to record customer-held cryptoassets as liabilities. Stuart Alderoty criticized this proposal as an “unauthorized exaggeration” by Gary Gensler, the President of the SEC, emphasizing the threat it posed to the decentralized nature of the cryptocurrency sector.
The response from both the Senate and the House of Representatives was overwhelmingly against the SEC’s proposal, with a near-unanimous rejection from politicians across the political spectrum. Paul Grewal, General Counsel of Coinbase, celebrated the decision on X (formerly Twitter), pointing out that the Senate vote achieved a significant majority of approximately 60 votes in favor of repealing the proposal.
Alderoty further emphasized the victory in another publication, underscoring the rejection of Gensler’s attempts to impose controls on the sector and highlighting the need for technological innovation to transcend partisan divisions. Former MicroStrategy CEO Michael Saylor also joined in the celebration, highlighting the bipartisan support for Bitcoin and cryptocurrencies in general from the Senate.
Finally, there seems to be agreement between both Democrats and Republicans: Gensler’s unauthorized expansion of authority in the crypto field will not be tolerated.
This defeat is yet another setback for the SEC, which has recently faced legal challenges in its efforts to regulate the industry, including lawsuits against prominent players like Ripple, UniSwap, and Coinbase.
John E. Deaton, a lawyer and XRP supporter, strongly criticized the SEC’s actions on his XRP account, describing them as “regulatory insanity.” He suggested that the SEC was being used by political figures like Senator Elizabeth Warren to push personal political agendas, disregarding the interests of the investors it is meant to protect.
In summary, the failure of the SEC’s bill SAB-121 is not only seen as a regulatory defeat but also as a reflection of the growing power and influence of the cryptocurrency industry in the political and financial landscape of the United States.
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Editor’s Choice: The SEC states that its decision in the case against Ripple does not carry any weight in other cases. Brad Garlinghouse remains optimistic about Ripple’s victory and highlights the industry’s ability to overcome the SEC.