After Embarrassingly Bad Performance, Ripple General Counsel Talks to SEC Cops

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General Counsel for Ripple Stuart Alderoty has criticized the SEC for its newly released Office of Inspector General (OIG) report. The SEC’s acting inspector general, Nicholas Padilla Jr., published a report earlier this month detailing Gary Gensler’s administration’s management and performance issues.

According to the OIG report: “The number of rule-makings on the SEC agenda increased by nearly two-thirds between spring 2017 and 2022.  Staff attrition rose to 6.4% in fiscal 2022 from 3.8% in 2020 and is the highest in a decade. The SEC is hiring more temporary employees from other agencies who have little or no experience in rulemaking.” 

The OIG believes that one of the SEC’s ongoing management and performance challenges is “meeting regulatory oversight responsibilities.” According to the Wall Street Journal (WSJ), the OIG’s review of Gensler’s leadership style is capable of causing a public company CEO to be fired. Division managers at the Securities and Exchange Commission told Padilla that Gensler’s leadership style is overwhelming staff and mismanaging investor protection resources.

Read more: 75 Million XRP Moved by Ripple as 120 Million XRP Changes Hands by Big Investors

Alderoty’s Reaction

Alderoty commented on the OIG report, noting that it contains an embarrassingly poor performance review of the SEC under Gensler’s leadership. Alderoty responded to a comment in the report, which confirmed that the Securities and Exchange Commission lacks jurisdiction over cryptocurrencies. He stated:

“The SEC’s Office of Inspector General’s (OIG) report is worth a read. Besides the embarrassingly bad performance review, the OIG concludes “there is uncertainty” whether the SEC has jurisdiction over crypto. This is the SEC’s cop on the beat talking.”

Read also: Ripple’s $250M Fund Supports Web3 Projects in the ‘Entertainment and Media’ Sectors

Alderoty Disagrees With Gensler’s Crypto Regulation Push

Gensler’s attempts to make the SEC the appropriate regulator for cryptocurrency markets have always been criticized by Ripple’s General Counsel. According to reports, Gensler believes Bitcoin is the only cryptocurrency that is not secure. Gensler implied indirectly that all crypto assets are securities.

Gensler’s attempt on behalf of the SEC to seize control of the cryptocurrency market has never been supported by Alderoty. The nascent asset class has been criticized as being favoured by Gensler’s enforcement-based regulatory approach. As a result of this tactic, the SEC has filed numerous cases against crypto-related companies, including Ripple.

Several members of the crypto community have condemned these unfortunate developments. Alderoty blasted Gensler last month, saying he couldn’t be the crypto cop on the beat.

Other cryptocurrency companies, in addition to Alderoty, have warned that Gensler’s leadership style at the SEC could devastate the country’s economy. Surprisingly, policymakers are also attempting to determine the optimal agency structure between the SEC and the CFTC.