TheU.S.SecuritiesandExchangeCommission(SEC)hascomeunderscrutinyformissingakeydeadlineinitsappealagainstRippleLabs.Theagency’slatefilinghasraisedquestionsaboutitsinternaloperationsandapproachtoregulatoryenforcement.Hence,hereareafewreasonsthatcouldbebehindthedelayinfilingtheFormCintheXRPlawsuit.
ReasonsWhySECMayHaveMissedRippleAppealDeadline
JohnDeaton’slawfirm,throughitslegalnewsplatformCryptoLaw,commentedonX(formerlyTwitter),callingouttheSEC’smisstep.TheypointedtoapatternofbehaviorunderSECChairGaryGensler’sleadership.TheyaccusedtheagencyofconsistentlyfailingtoadheretolegalprotocolsunderGensler’sleadership.
“TheSECunderGaryGenslerhasrunafoulofrulesandfailedtoshowfaithfulallegiancetothelawbefore,”saidCryptoLawinitspost.Thefirmalsonotedthatthiswasn’tthefirsttimetheSEChadbeencriticizedforitshandlingofhigh-profilecases,questioningthereasonbehindthemisseddeadline.
OneofthemajorfocalpointsintheongoingcaseiswhetherXRP,Ripple’snativecrypto,qualifiesasasecurity.InapivotalrulinginJuly2023,JudgeAnalisaTorresconcludedthatXRPitselfwasnotasecurity,CryptoLawhighlighted.
Onceagain@MoonLamboioisquiterightabouthowridiculousthislatefilingis,butrememberthatthe@SECGovunder@GaryGenslerhasrunafoulofrulesandfailedtoshowfaithfulallegiancetothelawbefore.But…WHYdidtheymissthisdeadline?
A🧵👇(1/6)https://t.co/enz7O4DqmD—CryptoLaw(@CryptoLawUS)October17,2024
TheSEC,however,didnotindicateanyintentiontoappealthisspecificruling,leadingsometobelievetheagencyisfacinginternalchallenges.TheSECalsofacedembarrassmentwhentheyexpressed“regret”overtheuseoftheterm“cryptoassetsecurities”inothercommunications.Thus,thelegalnewsoutletbelievesthattheFormCfilingwasdelayed.
TheyalsonotedthatMagistrateJudgeSarahNetburn,whohasbeeninvolvedinthecase,previouslycriticizedtheSECforitsinconsistentargumentsandlackoftransparency.Shealsoaccusedtheagencyof“hypocrisy”andfailingtoshow“faithfulallegiancetothelaw.”
ThiscriticismwasdirectedattheSEC’sattemptstowithholdinternaldocumentsrelatedtoformerSECofficialWilliamHinman,whichwereconsideredrelevanttoRipple’sdefense.Addingtotheinternalstrain,SECEnforcementDirectorGurbirGrewalresignedaroundthesametimethenoticeofappealintheRipplecasewasfiled,fuelingspeculationaboutinternaldisarrayattheregulatorybody.
CryptoLawhighlightedthesignificanceofthistiminginitssocialmediacommentary,stating,“AboutanhourbeforetheSECfileditsnoticeofappeal…GurbirGrewalresignedaspartofarecentwaveofresignationsattheagency.”
BradGarlinghouse’sReaction
ThiscomesafteraspokespersonfortheSECdownplayedconcernsofadelayedfiling.ThesourcetoldOX’sEleanorTerrettthattheappeal“isproceedingnormally,andthedocumentswillbefiledpubliclysoon.”Despitethesereassurances,theSEC’scredibilitycontinuestobechallengedasthecaseprogresses.
Meanwhile,RippleCEOBradGarlinghousevoicedhisfrustrationattheSEC’shandlingoftheappeal.InapostonX,Garlinghousecriticizedtheagency’sproceduraldelays.Hesaid,“Proceedingnormallyforanagencythatmakesuptheirownrulesastheygo!”
cryptonewsz.com