Gary Gensler ‘disappointed’ in Ripple ruling regarding retail investors
The SEC chair said the agency would review the opinion and continue working to bring non-compliant firms into compliance.
Gensler said that he is “disappointed” by Judge Analisa Torres’ declaration that sales of XRP tokens on retail exchanges did not constitute securities offerings. The judge ruled on July 13 that programmatic sales and free giveaways of XRP were not securities.
Conversely, Gensler said that he is content with the judge’s ruling regarding Ripple’s sales of the XRP token to institutional investors. Judge Torres ruled that, unlike retail sales, Ripple’s institutional sales were unregistered securities offerings. The company directly offered the asset to those investors via written contracts.
Gensler also suggested that his agency is reviewing the case’s outcome, as he stated the SEC is “still looking at it and assessing that opinion.”
He also made it clear that the SEC will engage with other firms. He said:
“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.”
Gensler made the above statements during an event held by the National Press Club, according to Bloomberg’s latest report.
XRP benefited from case outcome
The SEC originally sued Ripple in 2020, at which time it alleged that the company violated rules by selling XRP without undergoing securities registration. Ripple opted not to settle with the SEC and instead chose to fight the agency in court.
Following the favorable judgment for Ripple, the XRP token has seen a significant resurgence. Over the week ending July 17, XRP recorded a more than 50% gain, reinforcing its position as the fourth-largest asset by market cap.
However, Ripple’s legal challenges may not be entirely resolved, with some speculation that the SEC may pursue further legal action despite its recent setback. According to former SEC member John Reed Stark, there is a possibility that the latest decision could be overturned.