Gary Gensler's Speech Summary: First Comments on Ripple Judgment "Both Disappointed and Satisfied," Declines to Comment on Bitcoin ETF

Gary Gensler made his first public comments on the Ripple lawsuit during his appearance at the National Press Club in Washington, D.C., where he addressed various questions from the audience, including "Why enforcement over regulation?" and "When will there be confidence in a Bitcoin spot ETF?"

Gary Gensler: Disappointed and Pleased with Rulings

The speech mainly focused on the current state of AI development, and it was not until the discussion session after the speech that the host asked about the recent enforcement actions by the SEC.

Gary Gensler expressed satisfaction with the court's determination that "XRP institutional sales constitute securities," but disappointment with the ruling that "XRP plan sales do not constitute securities."

We are pleased with the ruling as it recognizes the importance of protecting institutional investors, but we are disappointed with the judge's decision regarding retail investors. We are currently studying and evaluating the content of the ruling.

For concerns about Gensler's response, please refer to: Reading through XRP court documents, explaining the reasons why XRP and the crypto market have not escaped securities risks

Why Does the SEC Prioritize Enforcement over Regulation?

When asked why the SEC and regulatory agencies always use "enforcement regulation" as a means rather than introducing a regulatory framework like the EU's MICA, Gary Gensler explained that the SEC has adopted various regulatory approaches granted by Congress, and all relevant regulations are on the table. He stated:

If you are going to publicly offer securities, there needs to be appropriate investor disclosures. If you are attempting to provide securities trading, whether it's cryptocurrencies, stocks, bonds, or one of the 30+ types of securities specified in the law, if it constitutes an investment contract, there should be sufficient investor protection, and that's what the SEC has been doing all along.

Returning to the question itself, Gensler emphasized that rules have been established for "special purpose broker-dealers" and "broker-dealers," and the enforcement actions are intended to fulfill the investor protection responsibilities granted by Congress and to act as a cop on the beat in the market.

When Will the SEC Approve a Bitcoin Spot ETF?

When asked what needs to be seen to believe that the time is right for a Bitcoin spot ETF and whether market manipulation is still the biggest obstacle, Gary Gensler declined to answer, mentioning ongoing litigation, seemingly referring to Coinbase:

That's a good question, but as the chair of a regulatory agency, we have received many ETF applications, and we should not have a predetermined position. There are also related litigations ongoing, so I think I have to decline this question.