The ongoing conflict between Ripple Labs and the Securities and Exchange Commission (SEC) is heating up, particularly with Ripple’s co-founder, Chris Larsen, taking a strong stance against SEC Chair Gary Gensler.
In a recent interview with CNBC, Larsen did not hold back, labeling Gensler as the “worst public servant of all time” and criticizing his handling of cryptocurrency regulations in the U.S., as well as his support for Kamala Harris’ campaign. While Larsen expressed his frustrations about Gensler and FTC Chair Lina Khan, he stopped short of advocating for Gensler’s removal.
Ripple has been locked in a legal battle with the SEC since late 2020, when both Larsen and CEO Brad Garlinghouse were named in a lawsuit accusing Ripple of selling unregistered securities through its XRP token.
Ripple argues that XRP should not be classified as a security, citing previous SEC statements to bolster their case. By October 2023, Ripple sought to dismiss the charges, with Garlinghouse claiming the SEC was trying to tarnish his reputation.
In a notable ruling from July 2023, a judge found that while Ripple’s sales to institutional investors violated securities laws, sales to retail customers on exchanges were compliant. Despite this mixed outcome, the SEC quickly appealed, signaling its intent to continue pursuing Ripple’s leadership. Ripple, in turn, filed a cross-appeal to defend its position.
Gensler, who was initially viewed as a potential ally for the crypto industry due to his background in technology and academia, has disappointed many by adopting a stringent regulatory stance.
His actions against major exchanges like Binance and Coinbase have drawn criticism, with Ripple’s Garlinghouse accusing him of hindering innovation and failing to prevent the FTX collapse. As the legal battle unfolds, it has become a pivotal issue in the broader conversation about cryptocurrency regulation in the United States.
